Gold price recovers most of yesterday’s losses

By:
on Nov 20, 2014
Listen

iNVEZZ.com, Thursday, November 20: The price of gold has recovered most of yesterday’s losses so far in today’s trading. Bullion was put under pressure during the previous session following the release of minutes from the latest Federal Open Market Committee (FOMC) policy meeting along with news that support for the ‘Save Our Swiss Gold’ referendum initiative was declining.
Gold for immediate delivery had gained 0.88 percent, or $10.37, to $1,192.74 per ounce as of 12:14 GMT, and was trading 1.2 percent below its 50-day simple moving average of $1,207.54. Bullion fell over a percent during the previous session and has now failed to close above $1,200 for two consecutive days despite managing to break above the key psychological level on both occasions.
According to minutes from the latest Federal Reserve policy meeting, released yesterday, officials saw improvements in the US labour market but ultimately didn’t provide many clues on when the central bank was going to raise interest rates.

HSBC analyst James Steel was quoted by The Bullion Desk as saying that gold’s failure to record gains following ‘dovish’ FOMC minutes “may be attributed to trading by technical investors”.
According to him: “For two consecutive sessions, bullion has briefly broken over the psychological $1,200 level only to see those gains wiped away later in the session.”
INTL FCStone analyst Edward Meir wrote in yesterday’s LME daily metals report:
“We suspect that gold might roll back some of its recent gains over the next few days, as we likely will be reverting to the familiar macro theme of the US economy continuing to expand, while the rest of the world decelerates”.
On the COMEX in New York, gold for December delivery had risen $9.3, or 0.7 percent to $1,192.4 as of 12:25 GMT. Futures fell during the previous session after survey results released by gfs.bern showed that only 38 percent of the Swiss population supported the upcoming gold referendum.
If passed, the ‘Save Our Swiss Gold’ initiative would force the Swiss National Bank to increase its gold holding to 20 percent of its official reserves, repatriate all of its gold and not sell any of its holdings. Currently the SNB holds 1,040 metric tons of gold, representing about 7.5 percent of its official reserves.
Both the Swiss government and the central bank have strongly opposed the campaign, saying that fixed gold reserves would limit the SNB’s ability to attain price stability and support the economy. According to results from the survey, 47 percent opposed the initiative while 15 percent were undecided.
“”With worries about the ‘Save Our Swiss Gold’ initiative receding, with the dollar holding on to its gains, and with inflation barely a concern, we feel that gold is poised to drop in the coming sessions””
“With worries about the ‘Save Our Swiss Gold’ initiative receding, with the dollar holding on to its gains, and with inflation barely a concern, we feel that gold is poised to drop in the coming sessions,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a note cited by Bloomberg.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

Ad

Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals.

Learn more
Commodity Precious Metals