Weekly Outlook: 2014, April 6 - 13

Gold Monthly Fundamental Forecast April 2014

Gold lost momentum this month after Janet Yellen took the reins at the Federal Reserve and began to talk about interest rate increases. Gold ended at 1284.50 down for the month after its high of 1392.50 hit on geopolitical tensions. Gold is slowly recovering from its lowest price in some years. By December last, gold had dropped below 1,200 but three months in to the New Year and it has recovered slightly to 1,312.

In 2013 consumers generated exceptional levels of demand for gold, with prices somewhat dependent on supply and demand like any commodity. However, precious metals are more complex and generally speaking no one event is likely to affect the price. The Crimean crisis and the threat of war did contribute to buying pressure which has eased towards the end of March with prices coming back significantly. Conversely, gold demand has been relatively bullish during the first three months of 2014 with a few flat patches thrown in. Investors have been a mix of local and international with a reasonably equal split.

Highest: 1392.50

Lowest: 1283.00

Difference: 109.50

Average: 1336.23

Change %: -4.02

Gold steadied on Wednesday after two days of losses but the precious metal remained near its lowest in seven weeks as strong U.S. factory data boosted optimism about economic growth, diminishing bullion’s safe-haven appeal. Physical demand from top consumer China rose slightly, with local prices trading at a premium to spot London prices for the first time since early March.

Though some in the market believe gold prices could head lower due to stronger equities, others say emerging physical demand and geopolitical tension in Ukraine could support prices.

Central Bank – Fed Reserve
Date of next meeting: April 30, 2014
Current Rate: 0.00% – 0.25%