Ending the session last Friday (22/1), gold fell down as the U.S. existing home sales were rising unexpectedly positive, marking the best year since 2006.
The gold price moved in a broad range between $1,102.45 and $1, 093.92/oz, before setting at $1,097.01/oz down 0.36% compared with the opening price $1,101.48/oz.
Such drop in gold was largely due to the data in the real-property market surged more than forecast and the selling positions for the weekend have been enacted to benefit from the high prices.
The U.S. home sales rebounded strongly in December, from a 19-month low and prices surged, indicating the housing market recovery remained firm despite signs of a sharp deceleration in economic growth in recent months. The figure got 5.46 million, which went beyond the expectation and increased by roughly 700,000 compared with the previous data. The housing market regained considerably which showed a positive signal from the US consumer spending – a key part in the US economy. The positive data has been dreadful to the demand for gold, thus, the gold price went down.
The Asian stocks inched up higher, with investors relieved after seeing the Wall Street rally on Friday (22/1) on the back of a sharp rise in crude oil prices. The European major indices gained the rebounce as the European Central Bank has hinted a further more stimulus. Draghi’s comments helped the “red in points” stocks recover some lost ground, hitting gold which had gained for the earlier week.
The global equity market has bounced back, bringing less fear among investors about the market uncertainty. The demand for safe-haven assets will not last for long, such things happen to the bull market of the precious metals as well.
The dollar strengthened against the euro after European Central Bank (ECB) President Mario Draghi said on Thursday (21/1) that it would be necessary to “review and reconsider” the bank’s monetary policy at its next meeting in March. Dollar strength has put a strain on the yellow metals, which gives yields for investors.
The slow physical gold demand from the major consumers China and India still kept a lid on the gold price gains.
Analyses of Group Fiinvesting