Commodities: Gold review
So after a quarter what was the commodity analysis of the gold?
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Commodities: Gold review
The US fiscal cliff negotiations continue their strong influence on the markets as gold prices depreciated from $1703.10 on Monday to $1660.80 an ounce during yesterday’s trading session.
The precious commodity dropped by $30 to a nearly four-month low, reaching an intraday low of $1662.
Gold began its decline during the meeting between President Barack Obama and House Speaker John Boehner held in attempt to avoid the imminent fiscal cliff due to take effect in early January.
As the talks progressed, it was announced that John Boehner’s so called Plan B has been rejected by Mr Obama and that caused further decline in gold prices.
Mr. Boehner’s plan proposed an extension of Bush-era tax cuts for people with revenue less that $1m per year, however without addressing steep, automatic cuts.
On Tuesday’s NYMEX session, the gold contract dropped to $27.50, or 1.6%, landing to its lowest settlement price of $1670.70 an ounce since 30th August.
During today’ opening session, gold has managed to offset some of the losses accumulated yesterday, trading at $1674.87 at the time of writing this article, yet still bellow the psychologically important $1,700 mark.
According to analysts, if gold successfully overcomes the resistance zone of $1676.10 - 1684.20, the aim will be reaching and testing the $1691.85 - 1698.15 zone. If successful, the upward trend will continue to $1702.35 - 1706.80. If it falls below the support zone of $1671.45-1667.60, its next support zone will be at $1661.05 - 1655.50. In case of a breakdown, the downward trend will continue to $1649.50 - 1642.20.
Despite its hard drop, gold continues to be one of the well-performing commodities in 2012, with an increase of 7% and heading to a 12th consecutive annual profit. Some analysts, who remain very bullish on the precious metal, anticipate that gold would touch prices of $2,000 an ounce next year.
Source: dfmarkets.co.uk
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