Spot Gold is higher in Europe Tuesday, buoyed by a more positive tone across the broader markets and expectations among some analysts and traders that the yellow metal’s recent downtrend may be almost over. At 1122 GMT, the spot price of Gold was $1,591.08 a troy ounce, up $26.58 or 1.7% on the day. Other precious metals were also higher, as was the Euro and European equity markets.
From a technical perspective, spot Gold should retest its 200-day moving average at $1,630.15/oz in the next few days, after which it may also see a retest of its 55-day moving average at $1,686.79/oz. These are key levels which should help to significantly lift the mood in the market after the Gold price slid 10.4% in December, participants said.
While Gold has been under pressure in recent weeks, the spot market ended 2011 more than 10% higher on the year. It was the 11th consecutive annual increase recorded for the Gold price.
Some analysts say that, given concerns of a liquidity squeeze and worries over the global economic outlook, Gold will remain at risk of sell-offs alongside other perceived risk assets.
Gold and silver will also be vulnerable to further pullbacks in the short term as funds reposition for the year ahead and index rebalancing begins, market participants said.
Still, other precious metals were gaining Tuesday as market participants returned following the end-of-year vacations. Spot silver was up 3.7% at $28.850/oz at 1122 GMT. In the platinum group metals, spot platinum was 0.9% higher at $1,406.40/oz, while spot palladium had climbed 1.4% to $660.25/oz.
EasyForexNews Research Team