Commodity Update; Gold – 26 September 2014

Gold breaks $1200; falls toward the key $1180 level

Gold continued its descent throughout much of this week as low physical demand and the evolving monetary policy outlook in the US saw investors left with little incentive to increase exposure to the metal.

Rumours that capital controls were being considered in Russia caused a temporary rally in the metal during the middle of the week, although this proved short lived as stronger than expected payrolls and unemployment data from the US led investors to look once again at the likely timing of the FOMC’s first interest rate increase.

In addition to the above, Friday’s US economic data also led to a broad based rally in the dollar. This exacerbated the pre-existing weakness in gold by effectively eradicating much of the discount available from reduced prices, thus discouraging those with the “buy on dips” agenda.  

Consequently, the gold price has broken below the $1200 mark and now appears to be heading toward a test of the all important $1180 support level. In line with our previous comment, we view a resounding break below this point as a clear indication that the longer term downward trend has resumed, which implies that it is only a matter of time before the $1000 level comes into view.

Spot Gold 10 Minute Intervals



The contents of this report and the Stockatonia website ( have been prepared to provide general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Please always remember that the value of investments may fall as well as rise. Investing in securities, and any other products associated with them, carries a high degree of risk and may not be suitable for all investors. For advice or guidance related to investing in securities markets, please consult with your own financial adviser.