Gold keeps hanging on

Once again the markets have seen confidence eroded by political instability today.

The gold bulls still have some hope that the price will return to the positive mood of 2011, as it clings onto the gains made after the Fed failed to start the tapering process. The fact that the Fed stated so categorically that economic data will be the catalyst for tapering means that, regardless of markets’ expectations about dates, calendars are irrelevant.

Even with the disappointment of the last couple of weeks, gold still looks set to post a solid return on the quarter, having risen around 8%. Of course, the year-long picture still leaves plenty of room for improvement, as the metal is down around 20% from January.

The question of where next for gold really depends on many of the world’s macro issues. Continued haggling in US politics and the knock-on effect of further delays in the tapering process could well help. However, with considerably more constructive conversations taking place between the US and Iran, general sentiment should improve.

Physical demand looks set to continue from China, the biggest growth market. However India, the largest existing market, is still trying to stabilise its currency and may well take further measures to prevent citizens from converting rupees into gold. As ever, there are more questions than answers.

Spot gold chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.