The prices of gold is now tumbling down and erasing the most recent rally, which was quite sharp – considered overbought by some. It is now trading at around $1775, down from around $1840 to $1850 earlier in the day.Â
The better than expected durable goods orders provided reasons for stock to smile, and for QE3 to fade further away. This means less appetite for the previous metal – a safe haven from currency printing.
Durable goods orders leaped by 4% and provided a very good surprise after so many economic figures disappointed. Also core order rose, amid expectations for a drop.
In addition, there is a rumor that troubled European countries are going to sell gold in order to combat their debt. The gold held by Spain, Italy, Greece, Portugal and Ireland is far from covering their debt, but is yet another tool for balancing the finances.
There are also talks that Greek gold will serve as collateral against future loans. None of these rumors are confirmed. In the past, China suggested that the US will sell gold in order balance its debt.
Update: Gold is hovering around $1760, and trade quieted down.
The sharp moves in gold prices are also related to the relatively low volume that is normal for August, although this is definitely not a normal August.
For more on gold, silver, oil and other commodities, see the website Trading NRG.
Another way to trade on gold can be done with binary options: check out the gold section on BO Crunch.
