The price of an ounce of gold is back at $1700 this week, following oil prices and stock markets lower as ongoing concerns over Europe’s debt crisis combined with news that the super committee in the US has failed to reach an agreement to cut $1.2 trillion in spending.
Latest Gold Price
Gold for December delivery plummeted $50.60 to close at $1,678.60 an ounce at the Comex division of the NYMEX. The gold price has traded as high as $1,727.40 and as low as $1,670.50 an ounce while the spot price was sinking $42, according to Kitco’s gold index.
Last week, the spot price of gold fell 3.7 percent to $1,723.90 per ounce and posted its first weekly loss since 21st October.
Sell Off on the Markets
The majority of last week’s gold price sell off occurred last Wednesday and Thursday, which marked the yellow metal’s worst two day stretch since early September. The move lower was accompanied by broad based weakness in commodities, oil prices and global stock markets.
Gold plummeted past the key support level of $1,680 with options expiring on Tuesday, which can trigger a lot of rebalancing and more volatility.
“It looks like the $1,680 area is the biggest open interest. I don’t think that there is any time where you can say it won’t be volatile … you need a seat belt to trade this stuff.” said Stephen Eubanks, director of institutional sales trading at Mr TopStep.
Further complicating matters for gold is that the US super committee, charged with slashing $1.2 trillion from the deficit over the next 10 years, most likely has failed.
This, combined with the ongoing debt crisis in Europe could well see gold prices fall further in the short term, as the US dollar makes gains off the back of a weaker euro, which tends to cap commodity gains as gold is priced in dollars.
Original post:
Price of gold back at $1700 an ounce, follows oil and markets lower
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