July 3, 2012

Welcome to the 3Q!

Welcome to the 3Q! Oh well, looks like gold starts it quietly, since all the familiar issues having its strong influence on gold remain. Traders are still keeping an eye on Europe, waiting for it to make further steps towards resolving its multiple dead issues and wondering whether U.S. economic data remain soft enough to spur more aggressive monetary policy action from the Federal Open Market Committee.

Gold went up on Friday since the response of a great majority of markets to the plan of European banks was positive, it was announce after the continent’s leaders summit and caused a serious fall of U.S. dollar.

The situation took another turn on Monday and gold went down again. So traders were quick enough to gain some profits out of the recent price changes…
The most interesting and confusing thing about gold price is that it does not exactly follow exactly same patterns every time. From time to time it reacts differently to the unfolding European events – sometimes the price rises with the euro on escalating optimism about European leaders successfully dealing with the debt crises and vice-versa. Sometimes it works the other way round, that is the pressure on the euro leads to turning to gold as a safe heaven.
Even experts seem to be at a bit of a loss right now.

Grady’s line seems to be an appropriate conclusion for the post…“Everything happening on gold is (based) on what is going on in Europe. The news on a daily basis is good, bad, good, bad. We just have to wait and see.”

Exciting times ahead! Like always :)

Stay tuned!

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