Wednesday 27 May 2015

Gold is going down


The gold is at approximately two-week bottom after yesterday’s depreciation by 2% when positive data came out from USA and increased expectations that the Federal Reserve will raise interest rates this year.
The dollar also held large profits after the rally that led to the biggest daily decline of gold after 30 April. The spot price is 1188 dollars, and yesterday it bottomed 1185.35 dollars per troy ounce and the lowest value after the 12th.
Yesterday it became clear that business investment in the US rose in April for the second consecutive month, while consumer confidence has reported a rise this month. This increase alerts that economic growth has gained momentum after slowing in the first quarter. Sales of new properties in USA also rose last month.
The strong data are synchronized with the speech of Fed Chairman Janet Yellen last week that the central bank is confident in the rise in interest rates this year. Her comments led to a rally in the US currency and an eight-year high against the yen and the strong rise against the euro. This made dollar-denominated assets like gold more expensive for buyers using other currencies.

According to some analysts, the market prematurely calculated secure economic recovery and this can be refuted on Friday, when the GDP for the first quarter may be revised to a drop compared to the original estimate of growth of 0.2%.

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