As the global economy flounders, gold grows stronger
Several factors are affecting gold prices these days. Investors are advised to watch the global economic data specially during this week, as they might encounter some surprises.
Surprises that might be more than positive for gold but, what is to be expected? Find out what the analysts have to say.
“It will be more important for gold investors to watch global economic data next week as that could have the biggest impact on prices in the near term”
Analysts in Kitco News
These experts highlight that there are several factors influencing gold prices this week; and precisely because the global economy seems to flounder, gold is expected to gain a strong foothold.
The recent global financial markets' data could translate into higher gold prices; and even though the gold price has come under pressure lately, it appears to be stabilizing around key support at $1,250 per ounce.
The best opportunity for gold is expected to come later in the week
And exactly, right after the European Central Bank’s monetary policy meeting. Gold could recover some of its lost ground; and according to Phillip Streible, senior market strategist at the online trading platform “RJO Futures”, gold prices could regain the $1,300-an-ounce level.
Eugen Weinberg, senior analyst at the bank “Commerzbank”, noted that despite the global risks, the U.S. interest expectations will keep gold fairly stable in the near term. And this stability is what will make gold attract new buyers to the market.
Further support for gold comes from China and India
India has always been among the two biggest consumers of gold in the world along with China with imports in the past going even up to 1,000 tonnes per year. The wedding season in India is the main contributor to gold consumption.
As for China, the reopening of Chinese markets has provided a solid boost for bullish investors. The current price of gold – $1,262 per ounce – will continue growing finding support from the Chinese buying, among other factors.
The physical demand of gold will keep on growing due to India's “Diwali”, the Hindu festival of lights and the most important holiday of the year to be celebrated this month, and China's Lunar New Year early next year.
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