Gold Holds Near 3-Week High as Rates View Weighed With Stimulus

Gold traded near the highest level in three weeks as investors weighed increased stimulus around the world against the outlook for higher U.S. interest rates.


Bullion for immediate delivery was at $1,200.09 an ounce by 3:21 p.m. in Singapore from $1,200.98 yesterday, when it climbed 0.3 percent, according to Bloomberg generic pricing. The metal rose on Nov. 21 to $1,207.93, the highest since Oct. 30, after China unexpectedly cut rates for the first time in two years, joining Japan and Europe in taking steps to spur growth.

Gold Prices May Fall to $1,270

Gold may extend its 19 percent slump since January as prices on charts form a “head and shoulder” pattern that signals more selling, according to Credit Suisse Group AG.

Bullion fell below $1,360 an ounce, a support level from the upward trend that began in late June, David Sneddon and Christopher Hine, technical analysts at the bank, said in a report yesterday. The drop may lead to the formation of a small head-and-shoulder top, they wrote. The pattern comprises three consecutive peaks on a chart, with the middle being the highest.

Prices may slip further to test $1,337, the 38.2 percent retracement of the June-August rally on Fibonacci analysis, according to the report. A fall below the level “should add weight to the scenario” that a broader bear trend is resuming, taking the metal lower to $1,270, they wrote.

HSBC says $1,900 Gold by Year-End


Since reaching an all-time record high of $1,923 per ounce last September, the price of gold has not fared particularly well.  The yellow metal has languished for most of 2012 amid considerable strength in the U.S. dollar, the ongoing European sovereign debt crisis, and the lack of further quantitative easing by the Federal Reserve.

Nonetheless, gold is due for a substantial rebound in the months ahead, according to analysts at HSBC.  In a report published this morning, the firm forecasted that the yellow metal will climb to $1,900 per ounce by year-end.