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Gold close lower for the third consecutive year

Friday, Jan 01 2016
February Comex Gold futures traded flat-to-lower on Thursday without much fanfare. Volume and volatility have been down since December 4, a day after the European Central Bank stimulus program announcement crushed the U.S. Dollar.
 
The precious metal closed lower for the third consecutive year and investors are already bracing for further weakness in 2016 when the Fed is scheduled to make a series of interest rate hikes. Higher interest rates are bearish for gold because it doesn’t pay a dividend or interest. The key factor in 2016 that will determine the direction of gold prices will be the U.S. Dollar.
 
February Crude Oil prices finished lower on Thursday and the overall market will end with a second consecutive annual loss. Record OPEC supply and the unprecedented supply glut is expected to put pressure on prices early in the new year.
 
Early in 2016, traders expect concerns to be expressed about saturation in Europe and Asia. Available storage capacity will also be an issue. Some analysts believe that prices have to reach $20 a barrel before enough producers will be put out of business and a rebalancing of the market can begin.
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