Established in 1974
185,800 clients worldwide
Over 15,000 markets

Gold slips from six-week high

Gold is down 0.9% as investors secure profits from recent gains booked by the metal.

Gold recorded its first annual loss in 12 years in 2013 and the commodity finished the year just above the $1200 mark, but dealers hunting for bargains and investors switching their funds from equities to metals ensured that the precious metal got off to a good start in 2014. After an upward trend since the start of the year, it is not unusual to see to corrections from time to time.

The Federal Reserve’s monetary policy has had a big impact on the price of gold; investors started to sell last summer as they felt the Fed would reduce the bond buying scheme in Autumn. Tapering wasn’t announced until December but already there is speculation of additional tapering, which may be having a knock-on effect on gold.

Jon Hilsenrath of the Wall Street Journal has speculated that the stimulus could be reduced by an additional $10 billion per month by the end of January. If this were to happen we could see gold head towards the $1200 level.

Spot gold chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.