Bill Peerson, a Senior Broker at Accredited FX in Costa Rica says "We saw a six-week low today mostly due to an overall bearish attitude to the markets combined with a slew of technical selling. When we add the increase in the U.S. dollar index and the decline in crude oil there was a perfect recipe for gold to decline but frankly this pleases me. In essence we have an opportunity to buy cheaper and that can only be good."
Bill who has been working at Accredited FX for many years goes on to say "I have been profiting from gold in good and bad times and our firm made some heavy purchases today amidst the selling."
European stocks were also under pressure due to new worries that Spain may be in a worse financial position than first expected. This caused bond yields issued by the Spanish government to rise when the central bank announced that the economy in Spain has contracted by 1.7% in the 3rd quarter compared to a 1.3% contraction in the 2nd quarter. There are also worries that Spain may not be capable to meet its debt obligations. The Euro also declined on this news.
Nothing of any great relevance is expected from the Federal Open Market Committee meeting which is underway and ends on Wednesday afternoon. Bernanke however is expected to make the announcement that he will not run for another term as the governor of the Fed.
- - - - - - - - - - - - - - - - - -
Disclosure: Bill Peerson and other members of the trading team at Accredited FX are holding various long positions in gold with different expiry dates and strike prices.
Accredited International provides Forex trading services to corporate and institutional investors throughout the world from their head office in San Jose, Costa Rica.
Accredited FX is the managed accounts division of the company and provides Forex trading services to retail investors with minimum account balances starting at $5,000. Clients have access to one of the most sophisticated online trading systems available.
To open an account with Accredited FX, please visit our website at http://www.accreditedfx.com or call our client services team at +1 855 274 7539.
Follow us for up to date releases and news on the metals market on Twitter @accreditedfx
Forex trading involves substantial risk of loss and is not suitable for everybody. Only risk capital should be invested.