Gold prices are lower by 1.4% to start the holiday shortened trading week, falling to $1,184.10 per ounce. Global equity prices have started out the week on a bullish note, inspiring a double-digit gain for U.S. equities right out of the gate.
It was the day before St. Patrick’s Day, less than two weeks ago, that gold prices reached $1,141.60 an ounce, the lowest point to date in 2015. Ten days later the price of gold reached $1,219.50 as gold speculators whipped themselves into a frenzy over two key events.
First, the FOMC lowered its trajectory for interest rates and appeared to use the strength of the dollar to justify waiting before the first move to tighten policy. The dollar duly corrected serving to underpin all commodity prices in response. Second, further unrest in the Middle East gave rise to “hopes” that the flow of crude oil, of which there is arguably too much, might yet be slowed. Crude oil prices have come off the boil as investors take down a notch or two fears over the implications of Saudi Arabia’s attack on rebels in Yemen. However, the jump in gold prices appears to be fickle. The known holdings of gold among ETF companies fell from 52.677 million ounces (March 16) to 52.079 million ounces (March 26) during that $80.00 rebound in the price of gold. It would appear that the downtrend for gold remains intact.
Chart – Known ETF gold holdings fell despite recent rebound