The Gold may decrease in next week’s action if the Fed hold its course and tapers as anticipated for the end of quantitative easing.
The recent market action appears to have been a capitulation event that has exaggerated global slowing fears.
Negative headline news has reached a fever pitch, seasonal commodity price pressure remains in place, adverse Dollar action dominates, and perhaps most importantly, the international economic outlook continues to deteriorate.
While it is premature to suggest that a major bottoming of commodity prices is imminent, a combination of bearish geopolitical pressures, distinctly adverse currency market action, slack physical demand and rising physical supplies could result in a crescendo of selling and perhaps an intermediate bottoming in several markets.
In retrospect, the sharp slide in physical commodity prices was well deserved, what with global macroeconomic sentiment eroding in the wake of signs of lost momentum in the US recovery, threats of additional sanctions against Russia, and perhaps most importantly, a soaring US Dollar.
the world’s largest super-tanker has been booked by a Chinese trading firm in order to store crude oil at sea, increasing the number of vessels used for floating storage.
The tone of the global economy has deteriorated over the last month, and it has become apparent that portions of the Euro zone were much softer than expected during the second quarter.
Corn harvest in the Midwest begins next month and experts predict that there will be a significant excess of the crop after months of rain.
Gold futures rose slightly on Tuesday as the conflict between Russia and Ukraine was lowering confidence in the euro zone economy.
After Russia announced their warplanes ended drills near Ukraine on Friday, U.S. equities rallied.