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11.10.2013 15:20

Gold: an overview of the market situation

Gold prices have declined substantially , while leaving below $ 1,270 an ounce on expectations of an agreement between the parties of the USA .

Recent reports indicate that the Republicans and the Democrats may soon reach a compromise that will get out of the situation and save the country from default . On the eve of U.S. President Barack Obama and House Speaker John Boehner held a meeting , which, though of no consequence , but it was decided to continue negotiations on the temporary increase in the debt ceiling . On the sides positively evaluated the talks . The meeting of the parties and its evaluation is the main market expectations that soon will find a compromise . Recall that now we are talking about raising the debt ceiling for 6 weeks , during which negotiations will be conducted on a wide range of budget issues.

Some pressure on the price of gold had statistics from Germany, which showed that inflation in the EU 's largest economy slowed to 1.4 % yoy from 1.5% in August. On a monthly basis, consumer prices in Europe's largest economy have not changed.

Note that the limiting factor was the statement of the Deputy Chairman of the Central Bank of China, who said that China's economic growth will exceed the official forecast of 7.5 % this year, although some economic risks, such as debts of local governments and the "shadow banking" remain under the control . Recall that China's GDP grew by 7.5 % in the second quarter compared with a year earlier , that is, growth slowed from 7.7 % in the first three months of the year. Figure was also lower than the 7.7% in 2012 and 9.3 % in 2011. October 18 Bureau of Statistics of China, is due to publish GDP data for the third quarter , economists expect growth to be about 7.7%.

Also today, it was reported that gold holdings in SPDR Gold Trust fell yesterday by 1.8 tons.

We also add that many analysts remain bearish on gold on hopes that U.S. lawmakers will come to an agreement and will be able to avoid a default . In addition, Asian demand for physical bullion continues unabated. Fifteen analysts surveyed by Bloomberg News, expects that prices will fall next week , eight bullish , and four - neutral.

The debate over the U.S. budget helped stem the decline in gold prices this year , after some investors lost confidence in gold as a store of value. In addition, the sharp fall prevented demand for physical bullion in Asia, but there are signs that he is currently weakened due to fewer sales in India and China.

"Gold will continue to fall because no one believes that the policies violate the terms of raising the debt ceiling ", - said Jonathan Bush, director Delman SA in Geneva. - "Either Obama will sag under the Republican Party , or vice versa , but the agreement should take place ."

The cost of the December gold futures on COMEX today dropped to $ 1301.00 per ounce.

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