The pair of gold/ USD starts to rebound after it reached its lowest level at $1180.97 USD/ Ounce during the beginning of the early Asian trading. The level of $1180 USD/ Ounce is the lowest level for gold price for more than three years.
We had watched the decline in the gold price starts since April 2013, when the US Dollar starts to take support from the FOMC announcement showed that the Fed, could starts reduce operations of the quantitative easing program. During this period, the attractiveness of gold as a safe asset starts to declines due to the expectations of low inflation in the world and encourage economic data from the United States. Investors continued to transfer money from gold to stocks and the U.S. dollar.
In the last 12 months, gold price had declined by 22.23%. The repetitive question in our mind is the next trend of gold. According to the market trading strategy we will not see the levels that we have seen 5 years ago because of the cost of producing rate, which is much higher than the gold price these days. For this reason, I believe that the region between 1000 and 1160 will witness some buyers, such as central banks. I also do not think that gold prices will declare by the month of January again this year, except in the case of the Fed increased the pace of asset purchases.
Gold price market will watch some correction in the near future, as long as prices continue to trade above the level of $1160 USD/ Ounce. Up movement for the precious metal, the first challenge will be waiting for upward movement at the level of $1248 USD/ Ounce. Breach of this level could give the upward movement more power for which they need to test the level of $1300 USD/ Ounce, but of course they must overcome the $1266, 1276 USD/ Ounce before that.
In the event of the downward movement take its place it is not expected today, and prices began to fall, there will be support at the levels of $1218, 1200 and 1192 USD/ Ounce. We will witness this week’s issue important economic reports from the United States, and you must be careful that you’re selling about these events which could turn gold market upside down.