Gold News

Gold slips on Easy Al's uncanny forecast

Just how does 'Easy Al' Greenspan do it...?

Only yesterday the former Fed chairman said the US Dollar would keep sliding until America's trade deficit shrank. Today the US Commerce Department has said that September's trade deficit fell to $58.9bn from $64.3bn in August.

Uncanny! The US Dollar has promptly rallied, knocking gold back below $630/oz.

"The Dollar is probably going to regain some ground ahead of year-end," says a dealer in New York. "I think we are going to see gold lower."

Meantime, the current Fed chairman - Ben Bernanke - is flying to Beijing on Thursday to press Chinese officials for a stronger Yuan. First though, he will announce the latest US rates decision at 19:15 GMT today. Wall Street consensus forecasts a "stick" at 5.25%. The trade data will only support that call. And gold buyers have another reason to expect cheaper prices going into Christmas.

India's current wedding season – a key driver of jewelry demand in the sub-continent – will end this month. "The Christmas season is [also] more or less done," notes Darren Heathcote of Investec Australia in Sydney. "Jewelers have bought gold to manufacture it. It's the sales part now."

US jeweler reports also suggest the best may be behind them – unless they're willing to discount prices in the stores. A study from the US Jewelry Consumer Opinion Council (JCOC) reports strong sales over the Thanksgiving Weekend of mid-November. Nearly half of jeweler buyers responding to the survey said they'd been lured in by cut-price sales.

And what's happening on the other side of the equation – the supply side of the gold market? To read the latest view from the vault, click here now...

Adrian Ash is director of research at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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