[www.inewsguyana.com] – The Ministry of Natural Resources and the Environment along with the Guyana Gold Board announced that Gold tumbled almost five percent last week, dropping to the lowest since 2010 on October 31.
“The weakness in the equity market is providing some support to gold. Also, the dollar is taking a breather, and that is helping gold,” a medial release from the Ministry stated.
According to the Ministry, they continue to monitor the trade of gold and the movements in prices over the last couple of week and that Gold held near the lowest since 2010 on expectations the Federal Reserve is preparing to raise interest rates while other central banks add stimulus, boosting the dollar and hurting bullion demand.
It was noted that Gold is heading for the first back-to-back annual retreat since 2000.
“The European Central Bank sets policy on October 6 after the Bank of Japan unexpectedly added to stimulus last week. The Fed is moving closer to its first rate increase in eight years after ending a bond-buying program on schedule last month,” the release noted.
The release further noted that “Gold futures were little changed in New York as a decline in U.S. equities boosted demand for the precious metal as an alternative investment.
“The metal swung between gains and losses, dropping as much as 0.5 percent and climbing 0.4 percent earlier on the European Commission’s cut to euro-area growth forecasts. The bullion is heading for the first back-to-back annual retreat since 1998 as the dollar surged after Japan expanded monetary stimulus last week and the Federal Reserve moved closer to its first interest-rate increase in eight years. The precious metal dropped to $1,160.50 on October 31, the lowest for a most-active contract since July 2010.”
It was noted that Gold just holds above $1,158, the 61.8% retracement level of the move from the October 2008 low to the September 2011 highs.
“The gold bears remain in firm technical control as prices trade not far above the recent four-year low. The key “outside markets” remain in overall bearish postures for the precious metals—a stronger U.S. dollar and slumping crude oil prices.”
According to the Ministry, the “outside market” feature was the drop in crude oil prices to a three-year low of $75.84.
“Combined with the appreciating value of the U.S. dollar, these two outside markets have been a major influence on other markets the past few weeks—and especially a negative force for the raw commodity sector, including gold and silver.”
“The other feature was the Japanese yen which has slumped against its world rivals following the Bank of Japan move on Friday with a new batch of monetary stimulus. Whilst, the European stock markets were under selling pressure following news the European Commission reported it expects European Union gross domestic product to rise by just 0.8% in 2014. That’s down from the 1.2% growth-rate forecast the agency issued in the spring. The Commission cited the Russia-Ukraine tensions as a major contributor to the slowing EU growth the past few months.”
