The Week In Hindsight, 21 December 2013
The positive momentum in equity markets this week has not been mirrored in the Gold price. Investors in the metal turned decidedly bearish following the Federal Reserve’s announcement after an initial period of resilience; since that time sustained selling has seen prices pushed below $1200 per ounce.
The overall outlook for the metal over the coming months remains bearish, with investment demand somewhat reduced and inflation relatively docile; it is unlikely that prices can sustainably recover in the near term.
In addition to this, spot prices are just a short leg away from previous lows reached back in June. Should prices break below their previous floor level, the next point where any significant support is likely to be found is below the $1100 per ounce mark.
The misfortunes of gold were not matched by those of oil this week as both WTI and Brent Crude posted solid gains over Thursday and Friday. The brightening global growth outlook for 2014 looks set to support demand and help soak up production into the New Year; for this reason prices are expected to remain resilient from here into Q1 2014.