Gold: not much strength left
By Sergei Ruban
Some investors returned to the gold as a safe haven after the new conflict wave in Iraq. According to some analysts, gold received support after terrorists connected with Al-Qaeda, captured the northern cities of Mosul and Tikrit last Wednesday.
At the same time, the precious metal has been under intense bearish pressure so far as investors make their bids for US economic growth in the second quarter. American economy is recovering after a winter slowdown caused by the weather-related conditions.
We believe that the range $1265.00-$1300.00 shall limit the further growth of the metal. The gold market continues to stay around $1274 per ounce. There are no good reasons for buying the precious metals now. The labor market indicators, published in the United States, were good enough and we cannot expect a pause in the Fed’s QE tapering. On the downside there will be support at $1258 though.
The new better macroeconomic statistics certainly puts pressure on the metal’s value as it encourages investors to take their investments from gold in order to invest in other, riskier assets and industries.
The gold continued recovery, but the main scenario is a decrease to $1213.