We had watched the fluctuate of the precious metal during the last three days. The yellow metal was at the level of $1400 USD/ Ounce before the FOMC announcement about his new policy toward the Assets purchase program. Ben Bernanke, the Fed bank chief, mentioned that, the Fed is going to end the Assets purchase program by the middle of 2014. Which was the main event this week added more pressure on the gold price and pushed it to the level of $1290 USD/ Ounce.
The Fed announcement is an indicator for the improvement of the US economy, which for sure pushed the investors to head for the US Stock market. Today we had watched a conflicted signal related to USA labor data, which did not record the expected improvement, it moves from to 52.2 from May 52.3 while it was expected to reach 50.00 by the end of this month. The issue which gives the investors today a conflicted signal about the US economy, and made them ask, is the US economy improving, or not? the market think today that, the US economy improvement is not that strong to end the Assets purchase program, for this reason we watched a rise in the gold price by more than 1%.
From a technical point of view on the market, the precious metal is in a bad situation, and the huge decline ended its legend as the safe heaven. The US dollar again rules the world and records continuous profit based on the Fed report, the US stock market profits and the slight rise of the labor market.
According to Scotia Bank report, gold price is trending the level of 1156 USD/ Ounce in the near future.