Overall, fears of QE taper continued to act as a bearish factor for precious metal prices and a conitnuous decline in SPDR holdings was additionally acting as another negative factor.
MUMBAI, INDIA: Gold has been battered by the impending worries over Fed tapering and is set for an annual decline as investment demand fell in 2013.
The next fifteen days to New Year will be crucial for gold and market is expected to be volatile, Angel Commodities said in a monthly bullion report. Price trend for 2014 will be unfolded with clarity only after the Federal Reserve provides direction and indicatiion towards the pullback in stimulus spending in its meeting scheduled for the 17th and 18th December,.
"World markets are seeing a sense of caution as we approach the FOMC (Federal Open Market Committee) meet."
"Technically, the Fed would most likely continue with its bond purchases that are pegged at $85 billion each month as the target levels of unemployment rate and inflation are still to be seen in the future, although in case of the unemployment rate we could call it the near future as the US economy has expanded at a phenomenal pace of 3.6 percent during the 3Q2013 and this supports the thought that the job market in the US could improve drastically in the coming months,"Angel report said.
Indian demand was weak during festive season but a weakness in Rupee caused prices to decline to Rs 30,236 per 10 gm despite a decline in gold prices in dollar terms by 5.5% in November.
Overall, fears of QE taper continued to act as a bearish factor for precious metal prices and a conitnuous decline in SPDR holdings was additionally acting as another negative factor.
All in all, the second-half of the month of Dec’13 is expected to be volatile; unlike the usual lull period seen on account of Christmas and New Year celebrations as remarks and indications by the Fed will drive sentiments further, accordingly.
Price trend in gold and silver for the next fortnight will be tightly tied with the decision of the Fed. Since we expect the stimulus spending to continue for now, gold prices are likely to find some relief post the FOMC meet. Depending on cues provided by the Fed, gold and silver will set course into the New Year accordingly.
courtesy of bullionstreet
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