Weekly Commodities Update: Gold
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By ForexMansion.com
By Jonah S. Ford
The price of gold has been keeping precious metals traders on their toes over the last several weeks, as record setting volatility drives large moves in both directions. Gold has seen very large daily ranges and major swings in both directions to close out the month of September near an equilibrium point near $1,620 per ounce.
The dramatic drop from the highs above $1,900 per ounce was fueled in part by the rise in the US Dollar as investors withdrew their exposure to European Union countries as well as emerging markets. The end of the 3rd quarter added additional selling pressure across the entire commodities complex. Massive fund liquidations of hard assets, either to book profits in one of the only performing sectors of 2011, or redemptions as fearful investors moved entirely into cash, carried all of the precious metals lower as well.
The selling appears to have reached a selling climax with a move down to the long term support level of $1,550 per ounce. This is a key level for the price of gold because it marks the beginning point of the most recent leg of the bull market. The breakout above $1,550 set the momentum buyers into their accumulation frenzy that saw a $400 gain in the price of gold in less than 3 months. Last week’s successful bounce from this level suggests a possible stabilization of the market and raises the odds of an eventual recovery to the old highs. ......http://www.dailymarkets.com/forex/2011/10/02/weekly-commodities-update-gold-2/
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