What will be with the gold price on the commodity market in the beginning of the week?

On Friday in the cash market of precious metals in London, the gold price again approached to 1000 dollars per ounce. The official price of gold per ounce in London rose by 9.75 dollars, or 1%, and amounted to 998.25 dollars. This is the highest price for three days. Raising the price of gold was due to the persistence of a cheap dollar. Dollar Index (spot), reflecting changes in U.S. dollar against a basket of six leading world currencies, set below the 77 points the first time since late September 2008. Gold prices showed the quiet dynamics during most of August, but in early September, spot prices for the precious metal jumped up. Investors seem to have taken a more cautious position about the prospects for the economy - the stock indexes made their way down, and the volatility has reached the maximum level for the month. Seasonal trends may lead to an increase in demand for precious metals. As another factor that will influence the gold market - is expectation potential changes in investment rules on U.S. exchanges. Also expected further depreciation of the dollar, so that in the coming months, gold prices continue to move upwards.

But, despite the increased volatility, gold continues to trade in a range - from 985 up to $ 999 - the resistance is still too firmly, so that can expect further consolidation. After the recent significant drop in the dollar, the market needed at least some breathing space, and therefore in the beginning of next week, possible low activity in the gold market. It is possible that the growth of quotations of gold - is a new long-term trend. In the future inflation still will have an effect - in the world is not so bad. For example, export indicators of Germany grow the third month successively, and the development of a deflationary scenario is regarded as unlikely. Appetite for risk increases, investors come out of the dollar, which automatically maintains the quotes in gold.

Negative tendencies of a dollar exchange rate lead to search of reliable instrument of hedging. Now for many it is the trading of the crude oil market, but given the increasing volatility in it, many investors prefer the more reliable instrument in the commodity trading on the commodity market - is a gold.

Also, in connection with the stabilization of the global economy, many investors are looking for additional opportunities for profit. And the opportunity they find in the precious metals market.
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12.09.2009