Gold Price Will Broken USD1,300 per Oz

Precious metals, most notably gold and silver, rallied after the Fed stated its willingness to expand quantitative easing measures to support the US economy. The FOMC said it is “prepared to provide additional accommodation if needed to support the economic recovery” citing a rising, yet moderating pace, of business investment, a reluctance of business to add to payrolls, a depressed housing market and a modest pace of economic recovery.

Given gold’s close and positive relationship with liquidity and associated inflationary fears, the announcement saw gold rally in NY trade yesterday. In addition, the fall in the dollar, prompted by fears of currency devaluation, has provided an added impetus this morning. Yesterday’s moves saw gold finally push through the $1,285 resistance level, bringing our target of $1,300
within reach. Standing in its way however has been a significant drop in physical buying, with the latest rally seeing Asianbased physical selling emerge overnight.

Gold support is at $1,277 and $1,264. Resistance is at $1,297 and then at $1,304.

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