Faced world gold prices strong pressure more than a third of its value over the past year of 2013, and for the first time since the outbreak of the global financial crisis at a time when turning the direction of investors to assets more profitable, after the failure of gold to maintain its status as a safe haven for investment.
At the time that the new year will reduce the policy of quantitative easing and low levels of inflation in the United States. With hedge funds reduced bets from high gold in the new year on the back of expectations the Fed to reduce the quantitative easing policies.
Stimulus plan
Gold prices fell by about 27.4% over the past year due to pricing pre-Federal Reserve’s decision to withdraw plans to stimulate since the beginning of 2013 on the back of improved economic data next to the environment of zero interest rates and inflationary pressures on the global level in the last year in exchange for the improved performance of stock markets, high-yield , prompting investors to get out of the gold markets and enter into other markets.
Gold has achieved in the last day of trading last year, the worst annual decline since three decades while longer last year, the first decline after 12 years of ups cascade, pointing out that the price of gold has achieved the highest level in 2013 at $ 1,679.40 per ounce last January while it was lowest level at $ 1180.15 an ounce in June of the same year.
A safe haven
Gold prices are moving near the level of support at $ 1,180 an ounce, which in the case of breaking it down prices will continue to fall to low levels.
Gold prices are going in a downward trend over the medium term, which could push investors to get out of the gold markets and enter into other markets, after losing its luster as a safe haven for investors with better indicators of the U.S. economy which drives investors to come back to invest in fixed income instruments of America.
Beginning of correct
Gold failed over the past year in the rebound from the downward trend that began in October 2012 after a break of the rising channel , which lasted about 12 years and that took prices to the highest level at a historic $ 1,920.92 an ounce in September 2011 .
Last year, it may be the start toward correcting this upward trend , especially that gold will not be able to close above the price at the beginning of the year to open $ 1,674.25 an ounce after losing the factors that were behind this increase over the previous twelve years .
Gold lost about 25% of its value over the past year , after turning the trend to bearish market since April, while the improved U.S. economic data which increased speculation in the markets that the Fed would move to reduce the quantitative easing policies by the end of the year and then this led to a decline in the attractiveness of gold and was a key feature as a hedge against inflation .
3 reasons behind the decline
There are many reasons that led to lower prices for gold for the first time after 12 years of ups cascade including the environment of zero interest rates applied by the major central banks , which was supposed to support the gold markets as it supported the stock and bond markets , however, the significant improvement of economic data at the global level was one of the key factors behind reducing the attractiveness of the yellow metal as a safe haven for investment at a time of increased hopes that the global economy may be coming from out of the crisis .
Among the factors that affected the gold price data the third quarter of 2013 , which showed a rapid growth of the Chinese economy during the year , as well as for the U.S. economy , which achieved the best pace of growth since the first quarter of 2012, and in Britain accelerated growth within the top level for the past three years while the euro zone has achieved growth in the second quarter and graduated from the recession that lasted six quarters in a row. Thus , instead of heading to the expansion of the central banks in monetary policy to support growth as it preferred to maintain the status of the current monetary policy , while others alluded to the possibility of starting to reduce the quantitative easing policies in the light of improved economic performance .
European Central Bank , for example, William is heading to the expansion of the third wave of cheap loans or activation of the European bond-buying program , while the Bank of England preferred to retain the asset purchase program as is , without changing the value of 375 billion pounds . As for the Fed decided last December to begin reducing the policy of quantitative easing and gradually until it is fully completed by the end of 2014 . And began to cut about 10 billion U.S. dollars as a start to drop to 75 billion dollars.
Hint Federal withdraw quantitative easing policies in 2013 led to the survival of non- gold assets or bonds a safe haven where the process of withdrawing mitigation policies will lead to a decline in their prices dramatically . This condition is known as the « activate the risks and hazards stop » , where during the times when the risk is low risk theory activate and stop the risk that states that investors accept the high -risk investments .
This is what happened , as investors turned to the stock markets for high-yield , which had already risen to historic levels on the back of improved performance of the major economies in terms of
On the other hand the growth of corporate profits , particularly in the technology sector and the banking sector is also President of the causes of the financial crisis five years ago
« Gold On the contrary the engine head of a demand for it because of the trend of central banks to reduce the monetary policy , especially that of the U.S. Federal Reserve pumped trillions of dollars since 2008 to address the global financial crisis »
Exchange rate and commodity markets
Given the movements of the U.S. dollar , we find that there is a correlation inverse between the dollar and gold as well as goods resident in U.S. dollars , while the relationship was strong in the first half of last year when the dollar index to reach its peak in June, at 83.60 In contrast, gold prices dropped to the lowest levels in the same year, to $ 1,180.64 an ounce. And the beginning of the second half of the year seemed to weaken the relationship at a time when the price of gold has moved and the dollar within a downward trend starting from September
Oil markets have been one of the key factors that supported gold prices, but with the decline in oil prices to near the price of the year at the start of dealings levels of $ 91.77 last November although it has risen again on the levels of $ 97.00 at the end of the year. But the overall failure of the oil in the support price of gold in any form during the year.
Future Vision
Gold corrected about 38.2% on a scale Fibonacci retracement of the uptrend that lasted 12 years in a row , which started at $ 251.70 an ounce in 1999 , pointing out that gold broke the neckline of the head and shoulders in the short term target levels of $ 1180.00 an ounce.
Gold prices broke the support area on the level of corrective 23.6% on Fibonacci of the first attempt to face areas of support is very strong at the correctional level of 38.2 % , this is taking into account the role of the weak who played correctional level of 50% on the same scale corresponding to the levels of $ 1085.00 an ounce, noting that the state has a negative acceleration takes gold prices to the levels of support $ 889.00 per ounce, which corresponds to 61.8% correctional level on the Fibonacci and so in the medium term .
