Gold spot price weekly roundup: Gold back at week’s opening level

on Nov 15, 2013
Updated: Oct 21, 2019
Listen Friday, November 15th:_ In trading thus far this week, the XAU/USD has moved between 1294.25 – its highest point since 8 November – and 1261.28, which is the lowest point since 15 October. The price action initially was descent but since the MACD (9,12,1) formed a convergence on the H4 time frame the pairing has been rebounding, to be currently trading at 1286.29, 0.10 percent below the week’s opening price level.

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The price has since yesterday been receiving support from the 89-hour simple moving average. The daily stochastic has exited the oversold zone (below the 20-line) and is crawling upwards.
Billionaire investor and manager of hedge fund John Paulson, who halved his gold holdings in the second quarter of this year, maintains the view that gold will decline in the next three months, despite the recent rise. Paulson & Co. is the biggest investor in the world’s largest fund trading gold, SPDR Gold Trust, holding 23.10 million shares as of 30 September, a stake unchanged since 30 June, according to publicly-available registry data.

Demand for investment gold tumbled 21 percent in the last quarter, with investors selling 118.7 metric tonnes through exchange-traded funds. The precious metal is on the verge of logging a calendar year loss for the first time since 2000, on account of the rise in equities markets and the refusal of inflation to rise since the US Federal Reserve elevated its bond-buying programme late last year.

US Fed chair nominee Janet Yellen yesterday said that she would continue to support the central bank’s quantitative easing policy until figures show a strong economic recovery that could provide enduring job creation.
ABN Amro analyst Georgette Boele notes today that “gold prices have the tendency to edge higher on dovish central bank messages but the impact is rather limited”. She observes: “Everyone knows this is just a delay and the tapering will happen sooner or later. When you have a stronger economy, the market will start anticipating an increase in interest rates, and that’s not positive for gold.”

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And MKS Capital senior trader Alex Thorndike says in a client note that “from here gold may come under further pressure, with direction derived from moves in the FX market”. Thorndike thinks that the $1,270-$1,300 range should hold into next week but that “[t]he market will now look to next week’s (Fed meeting) minutes for any further information on a tapering timeline, which of course will influence gold and silver”.
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