Bullion extended Friday’s gains on a technical breach of $1,600

The gold price jumped $19.34, or 1.2%, to $1,618.40 per ounce on Tuesday as the prospects for further monetary easing across the globe gained steam. Gold price advanced alongside the broader commodity markets, which were buoyed in part by slight weakness in the U.S. dollar.  The SPDR Gold Trust (GLD), a proxy for the price of gold and the world’s largest precious metals ETF, rose $2.00, or 1.3%, to $157.09 per share.

As for the gold price, “Bullion extended Friday’s gains on a technical breach of $1,600,” according to VTB Capital analyst Andrey Kryuchenkov. “Just as before, gold continues to track the broader market, with sentiment still upbeat in the wake of the euro zone summit in Brussels at the end of last week.”

Kryuchenkov went on to say that “Peripheral bond yields in the euro zone remain subdued from last week’s highs, while many are expecting a rate cut by the ECB (of 25 basis points) on Thursday.”
Commerzbank analyst Eugen Weinberg noted in a report to clients that the potential for further easing in the U.S. has also helped support the price of gold.  “Over the last few weeks U.S. numbers have worsened a lot and this has brought about the probability of QE3,” Weinberg wrote, “which is probably the most important reason for the market to believe in gold.”

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