Gold prices opened strong on Monday at $1,231.37 an ounce, and buying brought the price up to $1,234.52 at closing. The price of gold chart reported an opening of $1,239.26 on Tuesday, with buying generating a subsequent high for the day of $1,247.15. Mid-day trading brought another high of $1,250.12 on Wednesday before some profit taking. Markets opened just below this mark on Thursday, and more selling took the price to $1,244.82 at closing. The buying began again at Friday’s opening, sending the price of the yellow metal to $1,249.91 before closing the week up at $1,243.31.
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The sell-off in U.S. equities played a role in feeding risk-aversion buying early in the week, and the sharp decline in the U.S. dollar index supported that move when it hit a six-week low on Tuesday. 1 Continued pressure on the dollar would be seen as bullish for gold prices. More declines in oil prices fed concerns over all commodities trading as new supplies pushed crude prices lower. 2
On the domestic front, the pulling of the health care reform effort caused some concern over the planned financial policies that are on the agenda. 3 This added to safe-haven purchases around the globe.
Looking to this week’s financial and political news several key U.S. reports will be released by the government, including Tuesday’s U.S. PCE Index and U.S. Trade Balance Report, as well as Friday’s U.S. Consumer Confidence Index. These are watched closely by the FOMC to determine levels of industrial activity and inflation trends.
Also coming this week is the Eurozone consumer inflation data on Friday, a report that will influence ECB actions relative to inflation. Another significant bit of news outside the U.S. is the expected invoking of Article 50 by the UK government on the 29th. This is anticipated as the first step to Britain’s formal exit from the European Union, and analysts are closely monitoring its impact on the markets.