Spot Gold Price Prediction
December 8th, 2009 Posted in Oil and Precious Metals
Name: Russell
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Gold fell today as the commodity continues its decline from the record high last week. Weighing on gold prices are a stronger dollar and the continuing affect of Ben Bernanke’s speech, highlighting reduced inflation worries. Gold is typically used as a hedge in times of inflation and a rising dollar. With reduced inflation fears, gold may begin to lose its appeal to investors, stalling the rally in spot gold prices.
Some of the recent selling can be attributed to traders being caught on the wrong sides of the trends. While gold has been steadily rising, the dollar has been falling. As the two instruments have begun a correction, traders have needed to readjust their positions, particularly before the end of the year.
The price of spot gold is down during today’s trading at $1149.00 from an opening price of $1163.60. At its height last Wednesday, gold touched a high of $1224.70 for a price drop close to $75.
The dollar has also broken away from its long term downward trend with a mild correction that began after Bernanke’s speech. The EUR/USD is trading down at 1.4735, down from a high of 1.5141. This is a correction of almost 2.7%.
Gold may not find much support from now until the end of the year as traders may be hesitant to take further long positions in the commodity with the year end fast approaching. We could see the price of gold trading sideways between the prices of $1180 and $1120 with a significant support line at $1135. However, after the start of the New Year a resurgence in gold buying could commence.
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Tags: dollar, Forex Trading, Gold, hedge, spot gold trading
