YEREVAN, December 24. /ARKA/. Gold quotes dropped significantly last week amid concerns about “budget breakdown” in the U.S. The price for gold tumbled to the new minimum of 1,635.17 USD per troy ounce recording the lowest result over the last four months.
Gold quotes fell significantly on Tuesday and Thursday as the talks over the U.S. budget didn’t appear as optimistic. At the end of the week, the House of Representatives declared on the decision to take a break till the Christmas. Better than expected U.S. GDP rate didn’t cast any optimism for gold quotes hike either. It encouraged the investors to withdraw cash in USD. Indeed, according to the latest data, the GDP rose 3.1% in the third quarter versus the expected 2.7%.
Nevertheless, at the end of the week, gold prices were balanced. As a result, gold cost slashed by 2.38% to 1,654.86 USD per troy ounce.
We do not project any changes in gold cost this week due to Christmas and holidays. However, talks between the Republicans and Democrats over the “fiscal cliff” may have some influence on the gold value.
Gold dynamics will depend on the macroeconomic statistics from the U.S. Of the American news we should focus on consumer confidence index and business activity index of Chicago PMI for December, and the number of initial unemployment allowance applications for the week earlier. We expect the data from the U.S. labor market to be pessimistic. Thus, gold quotes may climb.
Careful purchases at low prices may also raise the gold quotes. The expected fluctuation range this week will be 1,628.0 – 1,675.0 USD per troy ounce.
Copper price last week dropped 3.14% to 3.5650 USD per pound due to growing concerns around the U.S. “budget breakdown,” optimistic GDP rate and the upcoming holidays.
The increased reserve of this asset at London Metal Exchange also prevented hike in copper quotes.
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Drop in prices may encourage the investors dealing with lower prices to purchase copper. However, copper quotes will remain vulnerable amid the fiscal situation in the U.S. If the situation is deteriorated in the U.S., copper quotes will continue tumbling.
The copper dynamics will also depend on the macroeconomic statistics of the United States. This statistics is expected to be optimistic. The anticipated fluctuation range for copper is 3.50 – 3.63 USD per pound.
Mikael Verdyan, an analyst at FOREX CLUB, specially for ARKA news agency.
The opinion of the author does not necessarily reflect that of the agency.—0-
