Gold Lower as Stocks Attempt Rebound
Gold prices were hit with moderate losses to begin the trading week on Monday as stocks tried to rebound after seeing serious losses last week.
Gold prices fell nearly $30 per ounce on Monday and are now back below the $1200 mark. While stocks opened higher to begin the trading week, those gains did not last as equities eventually sold off sharply, rebounded again, and then fell once more approaching the close.
It seems that falling crude oil prices remain a thorn in investor's sides. Oil prices slid another $2.50 per barrel today, and are now trading around the $55 per barrel level. The ongoing slide in oil has spooked investors and is doing gold no favors either. The slide in oil is deflationary in nature, and the notion of falling prices is causing markets to sell off.
The dollar index was also higher on Monday doing gold no favors either. Dollar strength has kept a lid on higher gold prices thus far, and may continue to do so for the foreseeable future.
Gold has been building some decent bullish technical momentum up until today. Today's price action is indicative of bulls throwing in the towel once again. The gold market has simply not been able to put together a truly sustainable rally and still appears to be lacking any bullish catalyst to do so.
Investors are now awaiting Wednesday's FOMC meeting announcement. While no action is expected at this meeting, markets will be looking for any clues as to the timing of rate hikes by the central bank as well as its assessment on economic conditions.
Gold may simply be in survival mode until the new year. Should stock weakness remain in focus, it is possible that the yellow metal begins to garner more buying interest as investors look to reallocate assets.
This story is provided by Sharps Pixley, for more information and content please visit: www.SharpsPixley.com
16 Dec 2014 | Categories: Gold