Gold Fundamental Analysis

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Gold Fundamental Analysis


Gold added a few dollars but remained below the $1300 resistance point as traders look for safety ahead of three major events in the next few days. Tomorrow the ECB will introduce some sort of stimulus package. On Sunday the Greeks go to the polls and early next week the US Federal Reserve meeting will take place.

Tomorrow Mario Draghi, the head of the European Central Bank, is expected to unveil a  new plan to help boost the struggling economy of the euro zone. Specifically, analysts and investors expect Draghi to announce a program of “quantitative easing,” whereby the ECB could spend over 500 billion euros to buy the bonds of governments that use the euro.

Assets in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, last week rose 3.3 percent, the most since May 2010. Economists expect European Central Bank President Mario Draghi to make his biggest push yet to steer the euro area away from deflation by announcing quantitative easing on Jan. 22, according to a Bloomberg survey.Prices jumped 5 percent last week, the most in 18 months, as investors sought safety from turmoil in currency markets after the Swiss central bank unexpectedly abandoned the franc’s cap against the euro. The metal has climbed 9.3 percent this year.Federal Reserve Chair Janet Yellen has said it’s unlikely the central bank will raise rates before late April.




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