Gold fell almost $10 during early trading on Tuesday. After enjoying a three-day rally against a weak US dollar, gold prices finished on $1322.98 at 5pm GMT.
Precious metals were forecast to slump in 2014 due to positive economic data in the third quarter of 2013 giving traders the impression the global economy was making a healthy recovery. However, growth has slowed considerably since then and disappointing job data in the US has softened the value of the dollar.
Consequently market sentiment turned towards the safe-haven of precious metals as traders lost confidence in the market!
It appears now however, that market sentiment is turning back towards equities. The dollar has levelled and a selling spree of gold in Europe and the US in particular has stunted the yellow metals progress. Silver on the other hand continued to do well for a fourth day running.
All eyes will now be on Friday’s news when the Federal Reserve publishes the minutes of this month’s meeting. It is widely thought the US Central Bank will continue to taper its Quantitative Easing program, particularly as new chief Janet Yellen suggested the same in several meetings last week.
So what now for gold?
Gold broke the $1330 barrier during its three-day rally, but with the majority of analysts predicting prices will fall to as low as $1064 in 2014, it would appear the yellow metal is standing on the edge of an abyss ready to make a slow decent. Gold prices are forecast to average $1220 per troy ounce this year.
The global economy is also expected to grow stronger over the course of the year which will drive gold prices down. Sterling in the UK has strengthened considerably over the last three months and Germany recently announced positive economic growth on GDR. The Euro is holding its own and now Asia is back to business following the New Year break, China’s economy has stabilised the market.
China is also buying huge quantities of gold and are now officially the world’s biggest importer of gold, replacing India who for years had the number one spot. That was curbed last year however when the Indian government slapped a 20% surcharge on gold imports.
As a result of the levy, India is short of precious metal supplies and prices have ballooned forcing consumers to invest in silver rather than the yellow metal. Finance Minister P Chidambaram has said they will “look into” removing restrictions on imported gold following pressure from traders, but it is unlikely a satisfactory decision will be reached in favour of re-sellers.
2014 – great time to buy gold!
It would appear this is the start of a decline in precious metal prices, raising a green light for investors to snap up gold and silver and add them to your investment portfolio for attractive prices. To get the best deal visit coininvest.com today and protect your financial future with a sound investment of gold bullion.