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

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum 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 he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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