Gold continues to glitter
Gold bulls seem ever more determined to push the metal higher amid statement from Fed Chairman Ben Bernanke that rates are expected to remain at exceptionally low levels even when the economy will recover.
The statement folded back many speculations on rate hikes and pushed the shiny metal just 3$ shay of the 1100$ mental mark topping at 1097$ an ounce.
The fed’s rhetoric actually has not changed much from the previous meeting ,the fed pointed low inflation and unemployment as the key players in the fed’s rate decision rather than growth which has surprised for the upside. As it seems the statement only confirmed investors’ assumptions on future rates rather than being the pure driver of the latest surge in Gold prices.
In fact the fed’s statement is only a minor event as far as Gold players are concerned , the large scale of Gold purchase by India earlier this week is the true headline. India in a surprising move purchased 200 Tonnes of Gold from the IMF the largest single Gold purchase in 30 years. The purchase which sums up to half of the total IMF Gold holdings put for sell posses above all a true diversification of reserves out of the Dollar and into Gold in an enormous scale.
Although the fact Gold futures are so close to the 1100$ mental barrier could hamper some of the call bets on Gold futures , the fact the settlement price for the deal was around 1045$ an ounce could set a benchmark for future settlements (especially with China) and the 1045$ could easily become a support level in future downtrends. However the 1026$ is considers to be the most critical in the current bullish cycle and should be closely watched.
