Monday, April 27, 2015

Heraeus Gold Market Commentary

Weaker US economic data fuelled lingering doubts about the timing of an increase in US interest rates. Following the recent pattern, this offered encouragement for the gold price: The metal rose on Thursday up to nearly 1.200 $/oz before profit taking on Friday pressed it back under the level of 1.175 $. This latter move coincided with a weaker dollar also, which is rather unusual. The combined effect pushed the euro gold price to 1.081 €/oz, the lowest level since the end of March. Market participants in the Euro-zone reacted accordingly: While investors remained largely on the sidelines, there was a noticeable increase in buying from industrial users.
For the coming week, once again US interest rate policy will be the key focus of attention for market participants. This week’s FOMC meeting should bring the market some transparency about the Fed’s policy concerning interest rates. Hints about rising interest rates would again put the gold price under pressure and lead to a test of support at 1.160 $/oz quickly. The next significant mark is at 1140 $/oz, where physical buying interest should provide support. Significant chart resistance for gold is at 1200 $/oz and then 1211 $/oz.