Gold Falls To New Trendline

December 31st, 2015 by

Gold lost it’s grip on the $1067/$1069 trendline in early trading Wednesday, falling to the $1060 mark.  Spot gold in the US market closed at $1060.90, for a drop of $8.10. It held steady in a $2 range overnight. Sellers this morning are trying to test the $1057 support level, but prices almost immediately pop back up to $1060. Expect quiet trading on this, the last day of 2015.

Dollar Dampens Gold Action

The modest gold demand this morning is being nearly totally offset by a moderate rise in the US dollar. The euro ended the year at a loss for the second year in a row. 2015 ends with a loss of almost 10% for the common currency. It closed 2014 with a loss of almost 12%. The British pound, Japanese yen, and Chinese yuan all end the year lower against the dollar.

Influences on Gold for 2015

Federal Reserve interest rate policy and its effect on the dollar were probably the biggest factors in gold’s decline for 2015, followed by the US economy. As the economy held on to a tepid recovery, the Fed started planning on raising rates. Fed analysts were afraid that the long bull market in stocks is likely to end soon, so pushed for an interest rate hike so the Fed had room to lower it again if the economy contracted. This led to more strength to the dollar, and highest yields in Treasuries.

Slowdowns in China and Europe led investors to flock to these Treasuries, which have the highest yield of any G7 nation.

Technical Analysis

Prices are susceptible to any large orders today, as the market is experiencing very thin volumes. If prices break forcefully under the present $1060 mark, next support is at $1047. First resistance is at $1075, then $1080.

Gainesville Coin’s offices and sales floor will be closed Friday for New Years, but orders may still be place online at GainesvilleCoins.com. We wish everyone a safe and happy New Years!

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The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.