:: Gold Struggles for Traction as Bulls Wait on Fed and ECB

Gold prices had slipped during the Wall Street trading session but appeared to be gaining steam towards the trading day’s close, with the spot price of gold up 3.35 to $1597.20 per ounce. Since last week when gold prices saw their largest single day’s rally in three years on speculation that the recent dismal employment data could spark another round of QE from the Fed, the commodity has struggled to breach $1,600. Since the beginning of the year, following a 10% price rally in January, prices have steadily declined every month to the point where they are not essentially flat on the year.
However, in a note to clients, one analyst from Goldman Sachs said that they expect that soft economic data from the U.S. will continue to push up gold prices, though there is a limit to any upside gains. That leads into Ben Bernanke and the Fed; another Goldman Sachs analyst said that they believe that the Fed is likely to offer some easing later this month, with the probability rising to 23% from May’s 10%. During his testimony before the U.S. Congress late last week, Ben Bernanke was expected to lay out the Fed’s plans to stoke the economy but quashed those hopes when he made no reference to future easing.
One commodities analyst says that the events in the Eurozone aren’t factoring into gold prices as much as one would expect, and that the markets are really anxious for QE, whether from the Fed or the ECB. The Commodity Futures Trading Commission however showed that net long positions in gold have increased by nearly 30%.