Gold Analysis 9th November – Gold Higher On Safe Haven Strength – News, Forecast, Outlook
- The price of gold has extended recent gains, even with the current broad based US Dollar strength which often coincides with gold weakness. This comes as a risk aversion theme dominates market sentiment with the so-called U.S. “fiscal cliff” in focus. Gold has gained 3.5 percent so far this week, which is the most since the week ending January 27th.
- A recent Bloomberg poll shows twenty-five of the 33 analysts surveyed expected gold prices to rise over the coming week with only three taking a bearish stance. This ratio of bullish versus bearish gold analysts has the proportion of gold bulls at the highest level seen since August.
- Assets stored in exchange-traded products came in at 2,596.106 metric tons, as of yesterday, according to this recent data from Bloomberg.
- President Obama is a key supporter of the Fed chair Bernanke, and the re-election of Obama this week indicates that the loose monetary policy adopted by the Federal reserve is set to continue for the foreseeable future. This has seen market participants resuming their accumulation of the precious metal, as a so called “safe haven” and store of value with no counterparty. Gold bulls may feel that this is the trigger gold required in order to hit new highs.
- With the election now over, from the Fed angle, market participants will be looking ahead to any Federal Reserve initiatives which could be revealed or referenced in the December 12th FOMC meeting.
- XAUUSD (gold spot) is now heading for the first weekly gain seen in the last five weeks unless there is a dramatic turn of events today (9th November).
- Price is currently trading around the 50% retrace of the swing lower from $1800 area resistance to last weeks low at $1672.54. This is also aligned with previous support swing low from 26/9/12 at $1736. The $1800 area previous resistance remains as a key area, we may now be seeing traders entering the market in anticipation of a breakout above this level.