The gold is still finding difficulty to get up over 1300$ again by the end of the week while the equities markets are still under pressure and bonds prices growing up after the fed’s recent hints that it is to start lowering its monthly pace of buying by the end of this year to halt it with the middle of next year if the economic indicators came in line with its forecasts. The Fed sees the unemployment to get down to be between 6.5% to 6.8% next year and the growth to be from 3 to 3.5% next year despite the governmental spending cuts.
In the same time and as what has been described in previous reports about the gold, the demand for it as a hedge against inflation is offset by growing expectation of withdrawing the Fed’s stimulus power as this prospect give the greenback much more support putting the gold under pressure not the opposite at these current economic conditions while further easing of the inflation pressure gives the Fed more time to wait and see with no worries about the inflation which have grown in May as what we have seen this week with the release of US CPI going up to 1.4% y/y as expected this week from 1.1% in April and these rates can help the Fed to give the economy what’s more by keeping its QE the longest possible boosting.

The greenback has found it easy after the Fed’s meeting to push the gold down below 1321$ which could hold in the middle of last April after massive characteristic way of falling on breaking of 1523$ which could contain its falling more than once since getting over it on 8th July 2011 of it and God willing, the gold can meet now in the case of falling further below 1269$ which could stave off its falling this week another supporting level at 1149 and its breaking can  lead to 1044 before the psychological level at 1000 which getting up again from here can be met by resisting levels at some peaks within its recent falling way at 1302$, 1348$, 1375$, 1394$, 1421$, 1449$, 1476 before 1487$ which was the highest level and the formed lower high whereas it has managed to fall again after having a previous bottom at 1321$

 
Kind Regards

FX Market Strategist

Walid Salah El Din

Mob: +20 12 2465 9143

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