Gold Recovers Slightly But Fed Drives Pessimism

Gold analysts are bearish for a second week as prices head for the biggest monthly drop since June and approach this year’s low on speculation the Federal Reserve will curb stimulus as the economy strengthens.
Eighteen analysts surveyed by Bloomberg News expect prices to fall next week, nine are bullish and three neutral. The metal slipped 5.3 percent this month and is within 6.1 percent of the 34-month low of $1,180.50 an ounce set in June. Gold is poised for its first annual drop since 2000.

Bullion slid this year as some investors lost faith in the metal as a store of value, forcing mining companies to make at least $26 billion of writedowns and billionaire John Paulson to say he wouldn’t personally invest more in his gold fund. U.S. data this week showed jobless claims unexpectedly fell and leading economic indicators rose for a fourth month. Fed minutes signaled Nov. 20 that policy makers expected an improving economy to warrant trimming debt purchases in coming months.

via Gold Bears Persist as Prices Near Year’s Low on Fed: Commodities – Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza