Gold: a review of the market situation

The value of gold has hardly changed today, stabilized slightly below the level of $ 1,200, which is associated with the strengthening of the US dollar and expectations of higher interest rates in the United States. Recall, on Wednesday the Fed has indicated that it may raise interest rates next year, replacing the intention to keep them close to zero level "extended period" of time for a promise to show "patience" before making a decision to raise the cost of borrowing.

Gold, which does not bring interest income, it is possible hardly compete with other assets yielding interest, when interest rates rise. In addition, higher interest rates are likely to have support for the US dollar, which also have a negative impact on the situation of dollar-denominated metal.

"The market is now seeking to move away from the $ 1,200. The positions are evenly distributed, so the further it will set the direction of the news in early January," - said the expert Saxo Bank Ole Hansen.

Meanwhile, Commerzbank analyst Carsten Fritsch said: "it was surprising that gold has not dropped after the Fed meeting, given the strength of the dollar. We expect that the price of the precious metal will be under some pressure in the first half of the year, and perhaps will drop to about $ 1,100 per ounce in the second quarter due to the impact of higher interest rates, falling inflation expectations, lower oil prices and economic weakness outside the US. "

It is worth emphasizing, the dollar rose 0.4 percent compared with a basket of major currencies, while the yen fell on expectations of further stimulus next year to support the Japanese inflation.

Market participants are also monitoring the situation in the physical gold market. Importers in India for the first time in five months, offering gold at a discount to the price of $ 2 in London, indicating that excess metal on the market. Experts note that the demand in India is likely to fall significantly in December after the rapid supply growth in the previous three months.

Little impact also continues to yesterday's unexpected decision of the central bank of Switzerland set a negative rate next year. Swiss National Bank announced that, starting from 22 January 2015, the interest rate on deposits "overnight" will be 0.25%. This measure is aimed at weakening the Swiss franc and prevent deflation. Negative interest rates are likely to make Swiss investors move from cash to gold.

The cost of the December gold futures on the COMEX today rose by $ 3.0 to 1196.60 dollars per ounce.