|Gold Price as of 12 April 2013|
What cause the slump of Gold price on Friday?
"The Federal Reserve indicated April 10 that several policy makers favor pulling back this year on $85 billion in monthly debt-buying stimulus dubbed quantitative easing. Through 2012, the metal rallied for 12 straight years as central banks expanded their balance sheets."
"An April 9 debt assessment by the European Commission said that Cyprus had committed to selling around 400 million euros ($523 million) of “excess” gold reserves. The Cypriot central bank responded to that disclosure by saying it hadn’t discussed plans for a sale."
""Goldman Sachs Group Inc. said this week that the turn in the gold-price cycle is accelerating after the 12-year rally as the recovery in the U.S. economy gains momentum.
"European Central Bank President Mario Draghi said the profits of any gold sales by the Cypriot central bank must be used to cover losses it may sustain from emergency loans to Cypriot commercial banks. He spoke after a meeting of euro-area finance officials today."
"The possibility of Cyprus selling gold “is a heavy weight on the market, and could set a bad precedent for other central banks looking to relieve pressures from austerity measures,” Dave Lutz, head of exchange-traded fund trading and strategy at Stifel Nicolaus & Co. in Baltimore, said by telephone."
However most of the news being spread around are rather speculative as there is still no unconfirmed verdict on the pulling back of the quantitative easing by the Feds. Neither has the Cyprus bank decide upon selling their gold reserves.
Gold Future traders are laughing all the way to the bank on Friday, feasting on these unconfirmed news.
The next few weeks would be an exciting time as we see how the gold market will pan out. The next barrier to break is the USD1450/ounce level.