Gold, How Low Can You Go?

We receive many inquiries about Gold from our members and the public so we chose to give a deeper discussion on this week. Gold is back having a great fall last week against the U.S. Dollar. Gold to USD XAUUSD called last week plummeted from highs last week at the price of $ 1,391.85 and to acknowledge excellence for USD slumped to its lowest level in 2013 at the price of $ 1,269.40. The decrease is quite terrible because in one week than in a decrease of $ 122.45, XAUUSD also broke through the support level of 2013 is the last for the price of $ 1,321.00. This penetration must have triggered further sell orders together so quickly makes gold a cheaper price back to the price level in 2010. But what is the cause of the collapsed Gold continues downward? And what about Gold in the days to come?
For traders who are still wondering what happened to Gold to the extent that in 2013 it became a grim year for the Gold, then we will go back to what is called Quantitative Easing. Please note for Gold traders that the Federal Reserve's role in price fluctuations XAUUSD very closely. Since the United States entered into a prolonged economic crisis, the Federal Reserve has implemented several policy stimulus funds called Quantitative Easing. Quantitative easing has reached to a program called QE-3 3. QE-3 on the program, which was launched in September 2012, the Federal Reserve pledged to hold a bond asset purchases of $ 40 Billion per month and setting interest rates low until at least 2015. In December 2012, the Federal Reserve will raise the amount of funds disbursed to $ 85 Billion per month for QE-3 program is more effective to run. Quantitative Easing program is started from QE-1, QE-2 and QE-3 is also an important contribution to the rise in Gold prices in recent years is to touch the highest price at the price of $ 1,920.60 in 2011. This situation also creates interest both retail and corporate investors are rushing to purchase Gold-bulging even if the price is at a high level. QE-3 is also popular with the name QE-Infinity is no period of time and left open until the economy improves. QE program itself is not without conflict among Federal Reserve officials are worried if the program is allowed to drag the poor will have implications dikedepannya. What happened? Hence the U.S. economy began to rise. U.S. economic indicators improved during the year 2013 is that the Fed started to think about reducing the amount of QE-3 program. In the speech the Fed chairman, Bernanke stated last Thursday turned out concretely that the Federal Reserve will seriously monitor and plan to reduce the amount of bond purchases and QE-3 would terminate the program in mid-2014. Even if the plan is not yet running, but the market has reacted to the news of this terrible and made it back farther flung Gold.
If this plan is actually running, where the direction of which can be addressed by Gold? As we look at the weekly Gold chart below, the XAUUSD sentiment is still very bearish and bearish trendline formed can still continue. XAUUSD managed to breach the previous support which is at the price of $ 1321.00, triggering the decline continued until the price of $ 1,269.40 which makes the next support point for XAUUSD. Price $ 1,270.00 can provide temporary rebound in XAUUSD so if you want to sell will be aware of the correction. Gold prices may rebound for a while along with profit-taking from the seller and the buyer purchases while the view of the current low prices. Negative momentum has the potential to continue if prices break through $ 1,270.00, then XAUUSD could lead to price $ 1,225.00 - $ 1,220.00 for the moment.

 Fundamentally there are two things can be used as a point of reference for a bullish reversal back XAUUSD:
1. Low price can trigger physical gold purchases. Purchase of physical gold on a large scale by the retail, institutional or government can make Gold price reversal back up.
2. The state of the U.S. economy slumped again and turned off the Federal Reserve's bond purchases that reduce dimming U.S. economic recovery. This situation can also trigger a bullish reversal Gold back.