Gold price dropped $16.60 an ounce last week, and the technical indicators are pointing towards the continuing sell-off of precious metals. However, traders will most likely wait until the US economic data for March is released later this week before acting.
Job data for February showed encouragement for the US economy and last week’s stats for new jobless claims has raised expectations of a repeat performance in March.
Now investors are return to the US market, the dollar is gaining against other leading currencies and may be showing the first signs of stability after a long period of volatility. It seems the only thing that can stop gold downward trend is for the Crimea crisis to boil over.
Concerns over a clash between Russia and the West are by no means over. Western leaders are calling for calm and Obama does not want military action. Putin may be unpredictable, but it seems unlikely.
That is the view of traders at least as a massive sell-off of gold and silver in favour of equities. Analysts have thrown their hat into the ring and called the bluff of Crimea. It will take more than a squabble over land for the Ukraine crisis to get out of hand.
Investment banks are keen to keep gold prices around the $1300 mark, but that was breached last week as the yellow metal dropped as far as $185 an ounce before rebounding to finish the week at $1294.60.
However, it seems as though gold value was being propped up by the Central Bank of Iraq who announced they purchased 39 tonnes of gold in March worth $1.5bn. China has also been accumulating huge quantities of gold and if that continued in March, the Central Bank of the China will have also played a big part in keeping gold prices higher.
Precious metals plummet
The decline in precious metal prices may not be good news for people looking to sell their gold and silver right now, but is great news for investors looking to buy. With a strengthening global economy strengthen, businesses will gradually gain more confidence in the markets and gold prices will continue to fall.
Just how far gold prices will drop is anybody’s guess, and analysts have predicted it could go as low as $1000. Although some have predicted gold will go bullish and hit $2000 an ounce. Maybe one day, but not yet!
Having said that, we have seen how political events can affect the market and it surely won’t be long before another crisis blows up in a country that then causes more tensions.
Gold and silver prices may be on their way down this week, but prices may not stay low for long, so head over to coininvestdirect.com and make sure you get your gold and silver bullion bargains whilst you can.