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Wednesday, July 18th, 2018 - Buy Gold - Bringing you trusted gold news and gold investing information since 2006

Gold Hovering Below $ 1,500

Wednesday morning trading saw the gold price move up US$3.70, to US$1,490.60 per ounce, after a short attempt at breaking through the US$1,500 level overnight.

On Tuesday gold went down US$4.35 to US$1,484.91 per ounce, following continued weaknesses in commodities. Tuesday was the third consecutive day with a falling gold price, bringing the weekly loss to 1.1%.

The world’s largest gold EFT – the SPDR Gold Trust (GLD) – often a proxy for the gold price, also finished lower at US$144.74 per share, a reduction of US$0.64.

However, gold equities showed a – rather rare – positive development, finishing in positive territory. The AMEX Gold Bugs Index (HUI), a collection of the largest gold companies world-wide, ended the day with a 1.0%, or 5.04 point, gain, at 523.42.

While analysts agree that it is too early to say whether today’s performance by gold equities is a sign of a changing trend, it is definitely an encouraging sign.

Gold hit an all-time high on May 2, at US$1,577 an ounce, after which it has been seen sinking more than US$100.

Analysts at Scotia Mocatta reported the following in a note to clients regarding the recent weakness in the price of gold: “One thing is for sure, with comments about the potential for a ‘hard landing’ in China, USD-denominated commodities in general remain on the back foot, and in the short term, gold will go along for the ride.”

The same note predicted that, in the short-term, the gold price could fall as low as US1,445 – or lower – should the sell-off in commodities accelerate.

However, the long-term outlook is somewhat bright due to increased concerns over the European debt crisis, which has been worsened by the arrest of IMF chief Dominique Strauss-Kahn.

Mohamed El-Erian of PIMCO, said in a Bloomberg interview, “Don’t underestimate how important Dominique Strauss-Kahn was in coordinating action [between European policy-makers]… Without him it will be much more difficult to coordinate European governments.”


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