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Metal Market Pulls Brakes After Three-Day Winning Streak

ByICN.com
Published 11/18/2013, 02:56 AM
Updated 07/09/2023, 06:31 AM
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Gold kicked a very slim trade early Monday, with prices still hovering below $1,300 on the heels of Yellen's nomination and the Federal Reserve`s stimulus tapering being pushed to next year.

The precious metals market pulled the brakes again after a three-day winning streak, boosted by speculation that the Fed chain-designate Janet Yellen would maintain the bank's ultra-easy monetary policy. Last week, Yellen defended the Fed by making it clear that she will keep interest rates low and the bank's balance sheet growing in efforts to boost unemployment.

Spot Gold fell slightly by 0.23% to $1,287.26 an ounce as of 01:07 ET, compared with Friday's close at $1,290.18. The day's range is far between $1,284.76 and $1,290.75.

The Fed last month stood pat on its $85 billion monthly bond purchasing program aimed at stimulating the economy through low interest rates. Meanwhile, no change is expected until early 2014 as the economy struggles to add momentum amid lack of inflationary pressures.

While the Fed seeks to drag unemployment to its new 7% threshold, traders continue to closely anticipate the U.S. macroeconomic front. The latest reports suggest a slightly weaker-than-expected path for exports and jobless claims, two of the key factors which have modestly downgraded the outlook for the world`s largest economy.

Gold is apparently facing strong resistance at $1,290 so the downside scenario remains favored until we see a break above that level which would likely signal an initial move towards $1,305, and probably higher.

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