Gold: an overview of the market situation

Gold prices fell slightly today, reaching at the same time the lowest level since early January. Experts point out that speculation as to the timing of rate hikes Federal Reserve fueled sales of the precious metal.

Recall, the Federal Reserve during the two-day meeting to determine policy on Sept. 17 reduced its bond-buying program by $ 10 billion on the way to its full completion in the next month. The Fed also reiterated that rates are likely to remain unchanged for a "long time" after the completion of the program, although the predicted faster pace of rate hikes.

Meanwhile, today in his speech the head of the New York Fed, William Dudley said that there is no need to hurry with the increase in interest rates, taking into account the weak economic growth and inflation expectations at low levels. He suggested that now it is better to wait for the more obvious signals that the economy is recovering United States, before taking action. However, he noted that "low interest rates are not satisfied with the Fed," and that they should be raised as soon as possible.

"Investment flows are directed to the dollar, as well as in the stock market and the bond market is the United States, and is the outflow of the precious metals market, - says Peter Hug from Kitco Metal. - It seems that investors in precious metals have surrendered. "

In such circumstances, there is a sharp decline in investment demand for gold. Assets of the world's largest holder of gold investment institutions ETFs SPDR Gold Trust up on Friday fell by 7.78 tons and fell to the level of 776.44 tonnes - the lowest rate since December 26, 2008. Withdrawal is also observed from the majority of exchange traded funds (ETF). According to Bloomberg, the assets under management of these funds have declined over the past week, nearly 20 tons to 1696 tons.

"It is difficult to return to growth after the Fed news and given the strong economic performance of the United States. Support is very weak, and a high probability of falling prices to $ 1,200, "- said a trader in precious metals in Singapore.

The cost of the October gold futures on the COMEX today dropped to 1213.30 dollars per ounce.