Gold spot price rebounding from 29-day low
San Francisco (Nov 13) Yesterday the MACD (9,12,1) formed a convergence with the price action on the 4H chart, an event which thus far today has been pushing the price up. The ongoing intraday range is from 1265.79 to 1279.28 and at press time spot gold is trading at 1277.38.
The daily RSI (14) was yesterday rejected from its 30-line and is currently pointing upwards, supporting the bullish view. The daily stochastic oscillator is below its 20-line, which indicates an oversold market and suggests that the price may rebound.
Atlanta Fed president Dennis Lockhart yesterday described the US economic picture was ‘mixed’, with continued concerns that expectations for strong growth in the next year may well not be justified.
In his address on monetary policy and the economic outlook, Lockhart said: “To sum up, I remain cautiously
However, in an interview later in the day Lockhart observed that tapering is still a possibility at the 17-18 December meeting of the Federal Open Market Committee.
Meanwhile, Minneapolis Fed president Narayana Kocherlakota yesterday said that tapering would bring further delays to an improvement of the US economy. He went as far as proposing that the FOMC should increase the amount of its injections into the US money markets.
According to HSBC analysts, the price of gold is likely to be “on the defensive in the near term”. In a client note they say: “Gold’s negative price reaction to the possibility of a December Fed ‘tapering’ indicates to us that the bullion market is likely to remain sensitive to expectations for changes in monetary policy.”
Online shopping site e-Bay has reported that during the recent Dhanteras festival in India, its users were buying one gold coin every four minutes, with the 10 gram gold coin being the most sought after. Gold coin purchases outnumbered those of silver.
optimistic that growth will pick up next year. This is my baseline outlook. But, at this juncture, I can't fully discount the possibility that the expected economic improvement won't materialize and that we'll see a replay of the weak growth of the past three years. This possibility is an influence on my thinking about the appropriate direction of monetary policy, the topic I'll turn to now.”
