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17.12.2013 16:20

Gold: an overview of the market situation

Gold prices fell significantly today , while offsetting the growth, which was celebrated during yesterday's session , due to the expectations of the Fed meeting announcement . Experts note that the forthcoming comments will help to better understand the mindset of politicians, and their opinions regarding the asset purchase program . I also add that it would be the last meeting for Fed chairman Bernanke in this post - in the next month, he will give his powers Janet Yellen . Markets expect the Fed may decide to small decrease in monthly program to purchase assets , which currently stands at $ 85 billion per month. Nevertheless , the probability of this step is not high, despite the previously submitted data that were better than expected . Most likely , the decision to decrease the volume of the program will be made in the next year , namely, at the March meeting. Add that expectations regarding what the Fed will turn its program to stimulate the economy , which contributed to the growth in gold prices , putting pressure on interest rates and causes inflation fears , which in turn reduced the cost of precious metals by 25 percent since the beginning of this year.

Consumers of physical gold in Asia is also in no hurry to make new purchases in anticipation of further price reductions . In India, the volume of purchases remained modest due to lack of stock. Recall that earlier this year the Indian government has introduced a record import duty on gold at 10 per cent in an attempt to curb the growing trade deficit.

Meanwhile , we note that investment demand for physical gold bullion also remains lackluster - stocks in SPDR Gold Shares fell yesterday by 8.7 tonnes to 818.9 tonnes , while fixing its largest daily outflow of nearly two months .

The course of today's trading also affected the U.S. data , which showed that U.S. consumer prices unchanged in November after falling in the previous month , becoming the latest sign of weak inflation, which may affect the decision of the Federal Reserve over the decline of quantitative easing. But the basic prices , which exclude volatile food and energy prices , rose 0.2 %.

Compared with the previous year as a whole , consumer prices rose by 1.2 %, while core prices rose 1.7% for the period. Nevertheless , both figures lower than the annual inflation target of 2% Fed . Economists forecast that overall prices and core prices every 0.1% increase in October.

Cost February gold futures on the COMEX today dropped to $ 1229.70 per ounce.

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