Now investors start focusing their attention on France, less than a week after the S&P rating agency made a ”technical mistake” and sent some of their clients false info about a forthcoming cut in France’s credit rating. Anyway, the eurozone crisis keeps worrying investors. However, the eurozone economy hasn’t brought any unpleasant surprises so far. Moreover, Germany’s GDP increased by 0.5% in Q3 2011. France’s GDP gained 0.4%, which was better than expected.
The balance-of-trade deficit reached 2.1B euro. The eurozone’s quarterly GDP report matched the forecast (+0.2%).
Despite the uncertainty over the eurozone debt crisis, gold keeps losing its value after rebounding from 1800/oz. The famous investor and billionaire G. Polson is said to have reduced his investment in SPDR (a major gold ETF) by 36% in Q3 2011. Nevertheless, he remains the biggest private investor in ETFs. At the same time, G. Soros, another famous investor and billionaire, increased his investments in gold by 13%. The ETF reserves of gold are equal to 2312.3 tons, which is the highest volume since August 18th 2011 (2330 tons).
Fundamentally, gold prices will depend on the volume of the forthcoming money emissions on both sides of the Atlantic Ocean. Big-scale investors expect the US budget deficit to shrink by $2 trillion. Therefore, if (according to the plan) the reduction is less than $1.5 trillion, it will probably result in higher inflation expectations and a wave of gold purchases.
Asian market keeps seeing low physical demand for precious metals.
Forecast. According to the Department of Commodity Trading, , gold keeps declining in value. It may well test $1760/oz. On breaking the level, the price will head for $1751/oz and $1746/oz. Gold may also recover up to $1770/oz, thus trying to test $1777/oz. In order to initiate a rally it is necessary to break and consolidate above $1780/oz. In this case the next target will be $1800/oz.
Silver has stuck between $34/oz and $34.3/oz. Once the price breaks below $34/oz, it will most probably reach $33.70/oz or even $33.46/oz. A further rally up to $35/oz is possible only after consolidating above $34.4/oz.
