Gold Price Cuts Weekly Gain to 3.9%, Draghi Says "No" to Eurozone Gold Sales, China's GDP Data Eyed
LONDON (July 12) The GOLD PRICE slipped in London on Friday morning, edging down to $1271 per ounce and cutting this week's gain to 3.9%.
European equities pushed higher while the US Dollar rallied and major government bond prices rose.
US crude oil prices headed for their 3rd weekly gain on the trot, rising above $105 per barrel.
Silver prices dropped but held onto 4.2% week-on-week gains.
"A weekly close [in the gold price] above $1267 will bring in fresh buying on the belief [of a] bullish signal," says a technical note from market-maker Scotia Mocatta.
Scotia pegs near-term resistance in the gold price just above Thursday morning's 2-week high of $1299 per ounce - hit after Federal Reserve chairman Ben Bernanke said US monetary policy will remain "highly accommodative for the foreseeable future."
Doubting Bernanke's assurances, however, "You have to be a brave man or woman to hold gold into a Fed tightening cycle and a Dollar rally," writes The Daily Telegraph's international business editor Ambrose Evans-Pritchard.
"My guess is that the Fed will indeed to have to retreat from [tapering] QE in the end, just as it had to back away from premature tightening after QE1 and QE2.
"But we are not there yet, and they will take longer to blink this time."
A new report from ANZ Bank agrees, saying that the gold price is likely to fall further short term because "volatility remains high, and the drivers that have seen gold drop 25% so far this year remain in place."
"With many [gold] investors remaining trapped in a falling market," says the latest Commodities Weekly from French investment bank and bullion dealers Natixis, "there may be more rounds of bloodletting to go before some degree of sanity returns."
Natixis commodities analyst Nic Brown now expects "that the price of gold will drop slightly lower over the remainder of the year [before] the gradual return of net investment demand offers increasing support" in 2014 but the average annual price drops to $1200 per ounce.
Over in Turkey, a strike by workers at the Turkish State Mint - reputedly the world's heaviest producer of gold bullion coins between 2000 and 2010 - has crimped supply and started to push local gold prices higher, according to Hurriyet Daily.
