Gold falls through $1300 trapdoor

The valiant battle that gold has had with the $1300 level has ultimately been lost. 

Gold’s efforts to break higher have failed to convince traders of a shift in sentiment. General selling pressure has dissipated, and the broadly sideways movement of the precious metal is seeing it edge closer to a longer-term downward trend. Gold flirted with breaking this trend a couple of times at the tail-end of last year and the beginning of 2013, but these efforts have ultimately been far from convincing.

With the last weeks’ worth of US data having now been digested, markets are still some way short of a consensus as to if or when the US Federal Reserve will start to taper. The considerably better-than-expected non-farm payrolls caught the markets by surprise, and the reaction was seen in equity markets as well as gold.

Year-to-date this has been a poor year for gold’s price performance, as at present the price has dropped by 24% and is experiencing its worst performance for over thirty years.

Trading volumes are set to be thinner today across the board, and as such we could see a little more volatility in the metal than normal.    

Spot gold chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.