RSBL Gold Silver Bars/Coins

Monday, 15 October 2012

Gold Loses its Glitter

Last fortnight gold reached $1796.5- an 11 month high; following comments by ECB president Mario Draghi that more bailouts maybe approaching. He stated that “euro” is irreversible and that the bank was equipped to purchase the bonds of indebted countries.
Positive jobs figures, which raised hopes that Federal Reserve intervention through a third round of quantitative easing (QE3) will be short-lived, have boosted the US currency, while the euro has been under pressure from news that Spain may resist asking Brussels for a bailout. 

However last week, gold was moving on a slightly lower side- at around $1765 on Thursday morning. A stern warning by the IMF on global economic growth and a slow development of the Chinese economy resulted in this downfall.

On Monday, Gold was down 1.2% at 1733$ per ounce. This yellow metal hit a one week low following news from Euro Zone officials that Spain could ask for financial aid from the bloc.

Heavy fund liquidation and technical selling also pressured gold as data showed U.S. retail sales rose in September after Friday's strong consumer sentiment data. Bullion could see more weakness as investors feared the Fed might curb its stimulus due
to a brighter economic outlook

Gold rose to a 2012 high of $1,795.69 an ounce earlier this month. However, several subsequent rallies to break above $1,800 an ounce had failed and were met by heavy technical selling.

Also weighing on gold was data showing Chinese inflation was subdued in September while exports had rebounded at nearly twice the rate expected, dampening expectations for easing measures in the world's second largest economy.

This week the main topics of discussion are- revised German and French CPI data, Italian Bond sales results, US Q3 earnings and the LME week.

The Italian Bond Sale Results May Spark Euro zone Crisis Fears if Yields Rise. The European Union sovereign debt crisis and specifically the countries of Greece and Spain remain a major worry for traders and investor

LME week is to be held in London whereby the London Metal Exchange holds a series of events and meetings. Moreover, the US dollar index and crude oil prices will have a significant effect on silver and gold prices.

With little practical value, and most supply tied up in central bank vaults, gold is the most speculative commodity of all.

Nonetheless Gold, which is seen an alternative to currency, say investors, has the capacity to drive into tens and thousands of dollars. That’s the kind of appeal gold has.

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