Gold has fallen below $1,300/oz. once more. Can it get going again?
For two weeks in July, all was wonderful for gold bulls.
From July 9 to July 23, the yellow metal was up 7%. It seemed the world had finally opened its eyes to all that was right in gold. The sun was shining and the birds were singing for anyone with bullion in their possession.
Then, as fast as it went up, gold fell again from close to $1,340 per ounce during the last week of July to $1,280 yesterday, a loss of nearly 4%. For the whole of 2013, gold is down almost 24%.
What’s causing investors to shy away from gold once more?
Part of it has to do with economic data. GDP growth was 1.7% for the second-quarter of 2013, far above estimates. That has market participants thinking the Federal Reserve Bank will taper its $85 billion per month buying spree of US Treasury and mortgage bonds. As this would diminish future expected money supplies, the need for gold as an inflation hedge lessens as well.
So, with gold’s drop below $1,300 per ounce, is it now dead money?
Talking Numbers contributors Enis Taner, Global Macro Editor at RiskReversal.com, and Richard Ross, Global Technical Strategist at Auerbach Grayson, look at gold’s fundamentals and technicals.
What may be in store for gold? Watch Taner and Enis in the video above.