Wednesday gold kept its one-month high struggling around the resistance price of $1,700 per ounce. The precious metal will face more hard times unless it earns back its appeal.
By 03:28 GMT nothing much has changed and spot gold traded flat at $1,692.60 per ounce. In the previous session the yellow metal hit a one-month high of $1,695.76 per ounce. The high was on the back of strong quantitative stimulus of Japan’s Central Bank, aimed to sustain the sluggish economy.
The US gold also kept its steady pace at $1,692.60 per ounce. Market analysts predict that the price of spot gold could reach $1,706 per ounce later on Wednesday. The increase will come as an effect of the upbeat wave trend which began from the low of $1,653.44 per ounce on the 11th January. The upward wave may not not be finished yet and a rise is expected.
In the US¸ the House of Representatives opted to pass a bill that will increase by four months the period of the borrowing limit. Analysts are optimistic as the US debt ceiling discussion could boost the global economic revival.
The worldwide economic forecasts are becoming more positive on the back of sign of recovery in the United States, China and surprisingly Europe. Goldman Sash upgraded even its Euro forecast to 1.40 from 1.25. This optimistic economic data drove rally on the equities and precious metals markets. While this was good news for metals such as silver platinum and palladium, the performance of gold was left behind. Perhaps gold became too expensive already.
Analysts believe that the debt ceiling issue is solved but just for now. In respect market players will start investing into stock assets rather than gold.
In the previous trading session in the US, the Standard & Poor 500 index recorded a five-year high. This month the index is up by 4.6% so far. Gold is up only by 1% in January, this means that the yellow metal registered the worst performance from all precious metals.
