“Deeper Retracement” or a Rebound Ahead for Gold?
COMEX gold futures fell to as low as $1,686 per ounce in late morning trading on Wednesday, just as the U.S. Dollar Index reached its intra-day high of 79.845. However, the price of gold subsequently recouped the large majority of its decline to trade near unchanged at $1,695.50. The rebound coincided with the dollar paring its gains, as well as a broad-based rally in the commodities complex. Nonetheless, the yellow metal remains lower this week by 1.1%, and over 5.7% below its multi-month high of $1,798.10 per ounce – reached on October 5th. In light of gold’s weakness, several investment banks have updated their outlooks for the yellow metal in recent days. Strategists at Standard Bank asserted that “It appears that the risk-off sentiment caused by the lack of progress in the U.S. fiscal cliff negotiations is weighing on all asset classes, even the safe-haven precious metals…We believe that the market will find it difficult to sustain upside this week, at least u