|
Gold
is still trying to add to its recent gains which pushed it
up trading above $1700 psychological level after it could
easily get over it following the Fed's decision to keep the
target range for the federal funds rate at 0 to 1/4 percent
anticipating that the current economic conditions including
low rates of resource utilization and a subdued outlook for
inflation over the medium run are likely to warrant
exceptionally low levels for the federal funds rate at least
through late 2014.
The decision was not
widely expected by the Fed after the market has seen
recently improving of the US economic performance especially
in the labor market with the falling of the unemployment
rate to 8.5% in December which is the lowest since Feb 2009.
The Fed's economic assessment
has shown its current expectation of having longer time than
the markets were pricing for reaching the economic stability
which can warrant a rate hike increasing the probability of
having more easing measures with the inflation slowing down
and this was one of the reasons which was weighing down on
the gold prices as a hedge against inflation but after this
assessment, the market can wait now for easing movement by
the Fed accompanied with the inflation upside risks easing
in US.
As we have seen recently
constant falling of US CPI to reach 3% yearly in December
from 3.4% in November from 3.5% in October after reaching
3.9% in last September which is its highest level since
September 2008 suggesting that there can be deflation
pressure again to face the US economy which lead the Fed
before to take the QE2 decision in the beginning of November
2010 for fighting it and stimulating the economy putting
pressure on the cost of borrowing.
Gold
can face now resistance again $1762 and breaking it can open
the way for another resistance at $1802 which can be
followed by resisting levels above it at 1827, 1844, 1885
before its highest level at $1920 which has been reached on
6th of last September while the way down can meet
supporting levels now at $1648, $1627, $1592 before $1523
which could contain its falling from $1920 driving it up to
reach these current levels.
CLICK FOR FREE DEMO ACCOUNT
|
