Gold Prices Break Below Key Support as US Politicians Near Deal

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Commodities Trading

: 11 October 2013

With new hopes of a breakthrough to avert a US debt default, stocks and oil prices climbed on Thursday.

The progress being made in Congress saw US crude oil rally to $103.01 per barrel on the New York Mercantile Exchange.

Oil prices were further buoyed by the chaos in Libya as Prime Minister Ali Zedan was freed after having been held at gunpoint, adding to fears about future Libyan tensions.

Gold prices continued to fall, with spot gold on track for making its second weekly loss as the metal dropped below $1,300 to close at $1,298.19.

Stock markets have begun to recover on early signs that political parties are willing to make some compromise on the stalemate that's been plaguing the market for the past fortnight.

Gold has been having a lacklustre performance of late, despite its nature as a safe haven investment in times of uncertainty, and this may continue if stocks start to recover.



Commodities Trading

: 10 October 2013

Nymex crude oil prices slipped on Wednesday as the fiscal stalemate in Washington took its toll on the commodity markets.

Nymex futures for November delivery fell by more than 2.1% as rising stockpiles, lower growth forecasts and a prolonged budget crisis weighed on prices.

Volatility levels remain high as the volume of trades falls below 49% of the 100 day moving average.

Gold prices fell yesterday as stocks made gains and the dollar managed to regain some of its value.

As a result, the precious metal saw a decline of 1%, trading below the $1,300 level at the session low shortly before the close.

Investors turned their back on gold as the latest Fed minutes revealed that members had been expecting tapering to begin this year, boosting the value of the dollar.

Many traders have lost their confidence in gold as the metal has thus far failed to capitalise on the looming budget crisis in the US.



Commodities Trading

: 09 October 2013

The oil markets continued to see high levels of volatility on Tuesday, with US crude swinging between gains and losses.

Traders are on edge as the US draws closer to default, with investors apprehensively awaiting further development from Washington.

Oil prices did eventually manage to edge higher, closing at $103.49 per barrel, with investors also awaiting Wednesday's weekly US Oil inventory report.

Gold prices were quiet on Tuesday, edging a little lower as markets focused on law makers trying to end the closure of the US government.

The decline came as traders start to lose confidence in gold's safe-haven demand due to its performance over the past year, with the metal heading for its first annual drop in 13 years.



Commodities Trading

: 08 October 2013

West Texas Intermediate began Monday's trading session by dropping close to its lowest level in a week as the debt ceiling debate hampers growth, reducing investor confidence.

WTI regained some lost ground over the course of the day but still closed down at $103.03 per barrel.

Volatility is climbing in the oil markets and is likely to continue as many grow concerned about the risk of default.

The current economic and political standoff in the US was the main driver behind the gold markets yesterday.

As the shutdown enters its second week, traders are growing anxious ahead of a fast approaching debt ceiling, with no signs of deal on the horizon.

This bodes well for gold investors, with the market experiencing safe-haven buying on Monday on the back of current market uncertainly.

This latest strength in the gold market is likely to grow the longer the political impasse drags on.



Commodities Trading

: 07 October 2013

West Texas Intermediate crude oil prices rose by 0.51% on Friday, helping the market make its first weekly gain in a month.

The rise in price was down to speculation that the budget standoff in the US will soon be resolved, avoiding a government default on debt.

The market climbed to a high of $104.19 during the early part of the trading session, before falling back to close at $103.84.

Gold spot prices fell slightly to $1,311.09 on Friday after a week that saw the precious metal drop by more than 1.2%.

Gold prices shifted between gains and losses during the session as traders weighed the impact of the government shutdown and the possibility of tapering.

CFD investors seem confident that the US government will resolve the current debt limit and avoid defaulting, lowering the price of gold due to its safe-haven nature.

The lack of Non-Farm figures helped to minimise losses by making an October taper from the Fed even more unlikely.


By Jonathan Sudaria, 11 October 2013


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