Will Gold Prices Stop Climbing?
Gold prices have not halted rising in the past five months, on a monthly scale; whereas trading throughout this November was extremely high and the most volatile since last May. Meanwhile, as for New York's trading session last Friday; gold closed with gains by 1.47% at 1118.50, while this week's trading witnessed gold today opening with gains and recording a new historic high above $1130.00 per ounce, while still trading positive and is being heavily demanded by speculators and investors in the market alongside being demanded as a safe haven.
Meanwhile, the U.S. dollar plummeted sharply against a basket of foreign currencies; alongside the rise crude is facing after achieving its lowest this month, through last week's trading. Both of them pushed gold to head upwards, like other precious metals; however, we see that gold remains the most attractive and appealing trading among its new record levels.
The Japanese economy, second largest economy in the world, managed to expand in the past quarter exceeding expectations; where Japanese economy expanded by 4.8%, which is the strongest seen in two years. This growth appears to be due to the rise in domestic demand; thus, giving the possibility of Japan not witnessing the return of the sharp recession throughout next year. Consequently, the Japanese economy would have proved its complete exit out of the technical recession, as well as France and Germany; whereas, the U.S. economy is expected to officially exit the recession within the upcoming fourth quarter.
The major improvement we are currently witnessing in major economies around the globe will not be enough to revive it; however, we do see a group of traders demanding commodities amidst expectations that the exit of the economic recession was a reason behind pushing demand on commodities; such as precious metals. The more pessimistic side shows the economy's instability, alongside the fall of the U.S. dollar, needs formation of new safe haven reserves; where gold seems to be winning first place!
On the other hand, commodity indices throughout last Friday's trading session leaned towards the downside; the S&P GSCI index closed at 501.85, but after Japan's data release today, we cold witness positive bullish trading within the New York period alongside the continued dollar's plummet, which could have a hand in this.
As for silver and platinum; both spiked today and throughout last Friday's trading session. We see silver trading today at $17.68 per ounce precisely at 02:30 EST; whereas platinum presently stabilized above $1400 per ounce, trading at $1405.00 per ounce.
In general, we see that precious metals are heading towards financial markets due to the optimism from investors, but what makes gold stand out is how it manages to shine throughout most conditions. Meanwhile, the U.S. Federal Reserve pointed out that it will continue with its current policies; which are reasons that are pushing investors to expect low interest rates to prevail in markets, alongside more declines seen for the dollar. The dollar plummeting is causing a general direction towards precious metal markets.
Data shows that gold is targeting 1300.00 per ounce, but as we pointed out, we see that the next target could be at $1195.00 - 1200.00 per ounce, with overbought signs stopping it to rise directly towards $1,300, where no doubt the economy's condition will not stop gold's bullish direction over the medium term. However, the short term could face bearish corrections, where at the same time these corrections aren't expected to affect the general bullish direction tied to the dollar's weakness and need for a safe haven; thus, making gold continue rising.