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

Gold Takes A Breather – Sentiment Remains Bullish

After setting record highs  for two consecutive sessions, spot gold edged down 0.3 per cent to  $US1,581.66 an ounce,  as dashed hopes for additional US stimulus  measures took some heat off, although the euro zone debt crisis and  uncertainties on US deficit talks continued to support sentiment

After a nine-session winning run  pushed the price to an all-time high of $US1,594.16 on Thursday,  spot  gold was on track for a weekly gain of 2.4 per cent.

Gold dropped from its record $1,594.45 after Federal Reserve Chairman Ben S. Bernanke said that he’s not prepared to take immediate action to stimulate the economy. The Fed’s $US600 billion  bond purchase programme that ended in June, dubbed as QE2, helped gold  and other commodities stage a rally earlier this year.

“Bernanke’s comments on possibilities of more  stimulus on Wednesday played a big part pushing gold to record highs,”  analyst at Jinrui Futures in China Hou Xinqiang said.

“But now it seems that QE3 is not realistic —  flooding the economy with cheap cash probably won’t help labour market  recover much further, and will bring a lot of pressure from other  governments.”

Mr Hou said gold may face some pressure after  the nine-day rally, matching a similar winning stretch in 2006, but the  correction is unlikely to run deep as the sentiment remains bullish.

Technical analysis suggested that gold could  pull back to $US1,579.79, a high hit on May 2, Reuters market analyst  Wang Tao said.

Investors are eyeing a European Union  emergency meeting on debt crisis, as well as the results of a stress  test of 90 banks across the European Union due at 0200 AEST, followed by  a news conference.

If the test results turn out worse than expected, gold could get a lift towards $US1,600, said traders and analysts.

Fifteen analysts polled by Reuters lifted their 2012 gold price forecasts to a median of $US1,550, about 7  per cent higher than the consensus forecast of $US1,454 in January, on  diminishing confidence in global recovery and concerns over euro zone  debt crisis.


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