Gold Getting Ready For A Fall

Gold Getting Ready For A Fall
Gold Getting Ready For A Fall

International investors are the most upbeat about the global economy than at any time in almost five years, buoyed by the U.S.-led revival of industrial nations, according to the Bloomberg Global Poll.  Removing global concerns from gold traders is like pulling the rug out from under their feet. Gold has no hope at this point as it edges down. Gold is trading flat this morning at 1242.00 as traders take one last look and hope before the Federal Reserve meeting next week. Traders are trying to determine what stance the FOMC will take as Mr. Bernanke leads his last meeting. The odds now are favoring a reduction in monetary purchases by up to 25 billion dollars. Last month the Fed’s began to taper ahead of market expectations and reduced their purchases by just 10 billion dollars. With unemployment falling to 6.7% and inflation well within expected limits, the Fed’s will most likely favor a larger tapering package which will increase the value of the US dollar while killing gold.  Silver added 22 points to trade at 19.892 after tumbling this week as industrial metals fell on the back of the strong US dollar. The US dollar has been trading new recent highs. The DX is at 81.27 up by 6 points this morning.

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On Tuesday due to the absence of any economic data, the events and triggers we had expected for gold prices to remain mostly in a sideways trend failed to show while we had expected prices to trade marginally down. The same took place in Monday’s trading session. February futures gold prices traded down by around 0.81%. Today is going to be another steady trade day as there are no major events/triggers expected. In fact, the whole week has been very sideways and the market has been free from any major triggers. The IMF increased the global economy growth rate from 3.60% to 3.7%, which may have an impact on gold prices as global investors now anticipate a further cut down in the stimulus program.

Industrial metals edged higher on Tuesday as investors digested further evidence of tight nearby supply, although concerns about Chinese demand and worries that rising stocks of concentrate will soon be processed into metal kept gains in check. Copper is trading at 3.345 down by 2 points this morning as the US dollar continues to weigh on prices. Surplus stocks of copper will tighten significantly this year and next as new mine output fails to translate into refined metal, helping buffer prices from the impact of slow economic growth and uncertain Chinese demand, a Reuters poll shows. China’s refined copper imports in 2013 dropped 5.8 percent from record levels seen a year ago, although arrivals are expected to rise in 2014 as importers ramp up bookings for term shipments.

In other metals platinum is trading at 1457.70 up by $6.35 while palladium edged down by 80 cents to trade at 747.20.

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