Gold put in a solid week of gains last week, climbing $54 – its biggest weekly improvement since the end of August, signifying an arrest of the previous four weeks of losses throughout October.
The losses in October were a combination of a natural correction following on from week-on-week gains stretching back to the end of July, uncertainty in the run up to the US Elections, the effects of superstorm Sandy and better than forecast jobs news in the US.
The big news which stimulated the market last week was the re-election of President Obama. The Bank of England and European Central Bank’s rate decisions and subsequent statements of intent hardly registered – all eyes were on America to see who got voted in.
If it had been Mitt Romney, we’d have seen the price of gold drop dramatically – this was weighing heavily on price in the run up as the election was looking like a close call. His economic policies were an about-turn from those of Obama and so investors were wary of getting in behind gold until after the election.
With Barack Obama being voted in, the fiscal stimulus package known as QE3 will continue for the foreseeable and may even intensify if the US economy drops back into recession as a result of Congress not being able to agree a deficit reduction plan with the fiscal cliff looming. If a deal isn’t cut by the end of this year, huge cuts in public spending and sharp tax hikes will automatically come into effect. All eyes will be on this over the coming weeks as it’s likely to dictate the direction of most markets into next year.
The losses in October were a combination of a natural correction following on from week-on-week gains stretching back to the end of July, uncertainty in the run up to the US Elections, the effects of superstorm Sandy and better than forecast jobs news in the US.
The big news which stimulated the market last week was the re-election of President Obama. The Bank of England and European Central Bank’s rate decisions and subsequent statements of intent hardly registered – all eyes were on America to see who got voted in.
If it had been Mitt Romney, we’d have seen the price of gold drop dramatically – this was weighing heavily on price in the run up as the election was looking like a close call. His economic policies were an about-turn from those of Obama and so investors were wary of getting in behind gold until after the election.
With Barack Obama being voted in, the fiscal stimulus package known as QE3 will continue for the foreseeable and may even intensify if the US economy drops back into recession as a result of Congress not being able to agree a deficit reduction plan with the fiscal cliff looming. If a deal isn’t cut by the end of this year, huge cuts in public spending and sharp tax hikes will automatically come into effect. All eyes will be on this over the coming weeks as it’s likely to dictate the direction of most markets into next year.
Throughout this week there are a few key news events...
Early this morning Greece approved their 2013 austerity budget, and this will be followed later today by a meeting of the Eurozone Finance Ministers in Brussels.
Tuesday is a quiet day, with only the UK inflation data to look out for; but Wednesday is much busier with UK jobless reports and US Retail and Production Output data being released. Thursday is another busy day with Euro GDP and both Euro and US inflation figures due.
We see gold consolidating its gains this week and next, with a steady climb towards $1800. There is resistance around $1755-$1760, but after that there isn’t much in its way back to the previous yearly high of $1796. If the price breaks through that previous high and $1800 then there really isn’t much in the way of resistance all the way up to the record highs around $1900.
On the downside, we’ve got support at $1730, $1715-$1720, $1700 and $1693; so there are a number of areas of support below the market before we would see a sharp sell off all the way back down to the low $1600’s.
Early this morning Greece approved their 2013 austerity budget, and this will be followed later today by a meeting of the Eurozone Finance Ministers in Brussels.
Tuesday is a quiet day, with only the UK inflation data to look out for; but Wednesday is much busier with UK jobless reports and US Retail and Production Output data being released. Thursday is another busy day with Euro GDP and both Euro and US inflation figures due.
We see gold consolidating its gains this week and next, with a steady climb towards $1800. There is resistance around $1755-$1760, but after that there isn’t much in its way back to the previous yearly high of $1796. If the price breaks through that previous high and $1800 then there really isn’t much in the way of resistance all the way up to the record highs around $1900.
On the downside, we’ve got support at $1730, $1715-$1720, $1700 and $1693; so there are a number of areas of support below the market before we would see a sharp sell off all the way back down to the low $1600’s.
