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Gold markets fall apart

Monday, Jul 20 2015
Gold dropped to its lowest in more than five years early on Monday after strong U.S. inflation and housing data spurred expectations that the Federal Reserve will raise interest rates later this year. Spot gold fell as far as $1,130.23 an ounce in early deals, its weakest since April 2010, and was down 0.2 percent at $1,131.80 by 00:39 GMT.
 
Top gold consumer China said on Friday its gold reserves were up 57% at the end of June from the last time it adjusted its reserve figures more than six years ago. Despite the tonnage increase, gold now accounts for 1.65% of China's total forex reserves, against 1.8% in June 2009.
 
A collapse in gold, iron ore, and coal prices coupled with the impact of large international mining companies slashing investment has most influence om Australia. Just like Saudi Arabia, which is now burning its foreign reserves to compensate for falling oil prices, Australia faces a collapse in export revenue.
 
Aussie is currently being traded around 0.7350 level. Pair is likely to find support around 0.73 handle and resistance near 0.74 area. There will be no major data releases in the rest of the session.
More in this category: « UK house prices rose by 0.1% Will BoE rise interest rates this year? »

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