The pair of gold/ USD fell dramatically after the announcement of Mr. Bernanke, Federal Reserve Bank Chairman. The announcement said that, the Fed bank could reduce purchases of assets this year and it will be terminated during the year of 2014, in the case shown in the labor market outlook is always improvement.
Bernanke made his remarks during a news conference after he announced that the Federal Open Market Committee that it kept on monthly purchases of assets as they are at $ 85 billion. , “Said Mr Bernanke”: If the data in the next few months broadly with the expectations of Committee expects surely, he would be appropriate to modify the pace of purchases later this year. The Fed will continue to reduce the frequency of purchases standards during the first half of the next year, the program will be finished around the middle of the year.
It is very clear that the members of the Federal Open Market Committee, want to slow down the quantitative easing program, but they also wants to avoid creating expectations that the retreat will be a formal process. In other words, the way in which the Fed playing the papers will depend on future economic data. In spite of this, a lot of investors realize that the Fed will be moving towards reducing its purchases of assets this year, and it is something which is negative for gold prices.
The pair of gold / U.S. dollar quicken its decline after breaking below the key support level at $ 1360 USD/ Ounce, and closed well below the level of $1354.50 USD/ Ounce. For this reason, I think that the pair will head towards $1300 USD/ Ounce. Since the pair of gold / U.S. dollar has stopped or reflection at this level, which is likely to see some support at that point. However, the level of $1290.50 USD/ Ounce will be a basic level of continuity the downward movement.
If gold prices ended below this level, the defense of the downward movement would be at $1288 USD/ Ounce may not be able to repel the downward movement. In the event exceeded the level of 1288 USD/ Ounce, I think we will see $1220 USD/ Ounce. If the upward movement defended the level of $1288 USD/ Ounce, and reflected price, expect to see resistance at $1354.50 and $1360 and $1270 USD/ Ounce.