Yesterday (21/7), gold prices rebounded slightly, after sliding to the lowest from 2010 on Monday (20/7). In the end of the session, the price closed at $1,100.79/ounce, up 0.2% compared with the open price ($1,098.1/ounce).
Currently, at 3:53 p.m. GMT+7, the price of gold is at $1,094.35/ounce.
Today (22/7), the gold market may have little volatility due to lack of news. The focus of the day is the vote in Greek parliament on the second package of measures demanded by international creditors, to open talks on a new bailout deal.
The route to take “austerity” measures will not be easy for Greece, while disagreements are still exist in the country. Concerns about Greece will still put pressure on the euro in the short term, thereby creating momentum for the dollar, making bad impact on the gold price.
On the other hand, at the present, the risks of Grexit has faded, as the country had to compromise to get help from its creditors. Therefore, demand for gold as a safe haven also decreased.
In addition, there are some factors that may adversely affect the price of gold such as:
- Goldman Sachs Group Inc.’s Jeffrey Currie says the worst is yet to come for gold and that prices could fall below $1,000 an ounce for the first time since 2009. Currently, more than $4.4 billion has been erased from the value of exchange-traded products backed by gold since June 30. Holdings are the smallest since 2009. Maybe that investors tend to “run away” from the precious metal, while pessimism still exist.
- On Monday, gold prices slipped to a record low of five years due to the huge sell-off on Shanghai Gold Exchange. Investors expects that India will be the “hero” to light up the gold market. However, Indians seem to ignore the precious metal, even when prices are too attractive. Gold demand in India accounts for over 20% of global demand, therefore any changes in this market may influence the gold prices.
However, gold prices may go up due to the following reasons:
- Global stock markets fell, when large corporations such as Apple, Microsoft announced the poor data. It could make cash inflows pour into other assets such as gold.
- Gold prices have hit the record low in five years. Many investors think this is a good time to buy, when the price is relatively cheap.
Forecast: Gold prices are likely to fall toward $1.087/ounce.