12 April 2013 : Gold Sinks Below USD1500/ounce!

Spot Gold Price closed at USD1477.60/ounce on Friday, the lowest ever since July 2011! The dawn of a bear Market for Gold?

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. 

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Cyrpus Clinches Bailout Deal, Gold Price Dips

Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout. That piece of so called "good" news caused Gold Price to dip below RM160/gram barrier for the first time. 

Gold price fell to a low of RM157/gram before making recovery to RM159.89/gram as of writing. Gold investors banking on the collapse of the Cyprus bailout were left disappointed as the previous one week gain in gold price were wiped out within a day. 

With the Cyprus crisis temporarily averted, there is not much action to be seen from gold. Overall outlook of gold price remains uncertain and could stagnate at this price range for the next couple of months unless some unfavorable data are released by the Feds or another Euro country springs a  debt crisis surprise.

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