Gold hasn’t had the best week. After a Greek election result that spurred profit-taking, an FOMC statement that sparked long liquidation, and a push higher for the U.S. dollar, the shiny metal has been left somewhat tarnished.
Spot gold is currently trading around $1,570 a troy ounce, down 3.5% since last Friday’s close and 3.7% lower than at the start of June. With many market participants previously tipping this week as a crucial test of gold’s safe haven status, has gold missed its chance to prove itself?
Monday saw gold soften after a pro-bailout party won the Greek vote, soothing immediate concerns over a Greek exit from the euro zone and leading some investors to take profits on the previous week’s safe-haven bets.
The metal then fell further late Wednesday and Thursday after a Fed statement signaled only modest stimulus measures rather than the full QE3 blowout the market was hoping for.
While gold has stabilized somewhat Friday, it has failed to find much upward traction. Despite lower prices, physical demand for the metal remains lackluster and without the promise of aggressive U.S. stimulus, gold may struggle for upward momentum in coming weeks, say market participants.
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