Spot gold prices are consolidating around unchanged levels Wednesday, after Tuesday’s session saw prices establish themselves above
$1600 to close at $1617.35 a troy ounce. Gold prices remain underpinned by increasing speculation that the Federal Reserve may embark on another round of quantitative easing (QE), after a string of weak economic data has seen flows return to the precious metal, with market speculators pinning their hopes on an ECB rate cut Thursday and some imminent stimulus measures from central banks. A disappointing US payroll figure on Friday is also anticipated by some, helping underpin gold prices as fund managers enter the market to buy trading dips. Gold has now risen a lumpy $70 from post EU summit levels, measuring the degree of confidence investors have in the Fed possibly initiating some more QE, although the scenario is doubted by some so soon after the extension of Operation Twist. Resistance for gold is seen around $1628/31, with medium bids seen at $1607 and below at $1594/96. Trading is expected to be light in observation of today’s US holiday, with prices currently trading $1618.
EasyForexNews Research Team