Gold Heading for First Weekly Basis Gain After Five Week Decline
The price of gold has seen a continuation of the recent upside momentum following the re-election of President Obama. A Romney victory may have been seen as a negative for the precious metal, with an associated focus on reducing excessive debt; this could have found current Fed Chairman Ben Bernanke and his "ultra easy" money policy out of favor. Mitt Romney had previously criticized existing Fed policies and may have replaced chairman Bernanke.
Gold bulls may now see the re-election of President Obama as the catalyst required for gold to hit fresh 2012 highs. The key $1800 area resistance zone was too much of an obstacle, when hit in October, but recent gold analysis and statistics referenced below, suggests this area may now be fragile going forward.
An article from Bloomberg shows that Gold traders are currently the most bullish they have been over the last 11 weeks. This comes on speculation that U.S. policy makers could add to existing stimulus measures following the re-election of Obama which would see gold benefit as a perceived store of value. This survey revealed that 25 from the 33 analysts surveyed see the price of gold as potentially moving higher next week. This bullish/bearish analyst bias is the highest ratio found since late August this year and shows strong bullish sentiment from those involved in the survey.
Gold is currently trading around the mid-point of the last swing lower, after hitting the $1800 per ounce area resistance. The 50% retrace level is often viewed as an area holding an element of technical significance. The price of gold is now on track for the first weekly basis gain in the last five weeks, with a gain of 3.5% so far. Gold assets held in ETP's (exchange-traded products) hit 2,596.106 metric tons as of yesterday. A high reading relating to ETP holdings is viewed as a strong indicator that investors are bullish gold.