Archive for June 20th, 2011
Still Potentially Translucent Gold $ 1600 Per Troy Ounce
Gold moving sideways over the last few weeks and seemed unable to continue relinya which started earlier this year. Gold has moved up by 11.14% from early 2011.
Market players are awaiting visible Fed’s monetary policy meeting this June and look forward to what the next Fed policy of quantitative easing after the Fed stopped its Phase II of $ 600 billion. Some market participants and analysts open the possibility the Fed will adopt a quantitative easing phase III with the amount of funds injected less than before. Some are projecting the Fed will begin a step out of the stimulus gradually.
Quantitative easing by the Federal Reserve with the intention of encouraging banks to lend money to the business world so that businesses can expand and move the economy back.
From the daily chart, the price of gold is seen to have penetrated to the bottom line of the uptrend. This shows the current rise in gold prices restrained and entered a period of consolidation. When we draw the line Fibonacci from the highest level of gold at $ 1,576 per troy ounce to the lowest level at $ 1,462 per troy ounce, we will find retracement area of ??61.8% is in the range of $ 1,505 per troy ounce which could be the target level of correction in gold prices further.
Gold consolidation could occur in the range $ 1,505 – $ 1,537 per troy ounce at least until the decision of the U.S. Federal Reserve monetary policy on 22 June.
How does the movement of gold after the Fed’s announcement of decision creatures? In our opinion, whatever the outcome of the Fed decision, gold prices tend to rise still be able to penetrate even the level of $ 1,600 per troy ounce. Several fundamental factors leading to higher gold prices are:
The U.S. dollar that have not will be strengthened consistently since the U.S. economic recovery is still not added to the debt burden and the growing U.S. budget deficit. U.S. debt to GDP ratio was already close to 100%.
World inflation rate tends to rise. Gold is often used as hedging instruments of assets against inflation.
Uncertainty in the European settlement of the debt crisis cause concern to market participants continued to be a recession in Europe and could possibly evolve into another country.
Gold demand is rising higher than gold production. According to the World Gold Council (WGC), gold demand rose 11% in the first quarter of 2011 compared with the level of gold production is actually down 4% over the same period.
Trends in the addition of gold holdings by central banks in the world. According to WGC, in Q1 2011, total purchases of gold by central banks has reached 129 tons. This amount is higher than the total central bank gold purchases during 2010.
From the analysis of any chart of gold prices are still projected to rise to record an increase this momentum can be lost if the gold price down through important support levels at $ 1,462 per troy ounce