El Salvador president proposes bill to overturn metals mining ban
In 2017, El Salvador became the first country in the world to ban forms of metals mining.
The gold price on Wednesday slumped to levels last seen in July, dropping more than $30 an ounce or 2.5% to a day low of $1,240.20 after comments from members of the the US Federal Reserve put a quick end to the central bank’s monetary stimulus program back on the table.
Minutes from the US Federal Open Market Committee’s end-October meeting released on Wednesday coupled with comments made by Fed Chairman Ben Bernanke and St. Louis Fed President James Bullard indicated that cuts to the quantitative easing program could come as soon as December.
The minutes showed that nominee chair Janet Yellen, who during nomination hearings last week was broadly supportive of the Fed’s quantitative easing (QE) program, may be in a minority when it comes to deferring any tapering of the $85 billion being pumped into financial markets each month.
Gold was also hurt by data showing US consumer price inflation falling to 1.0% year over year in October from September’s 1.2% rate, well below the level the Fed considers a problem.
Apart from the relatively brief deflationary period in the aftermath of the 2008-2009 financial crisis, US inflation is now the lowest in more than 45 years.
The money printing to the tune of more than $9 trillion in the US and similar action in Japan, Europe and elsewhere following the financial crisis have been a massive boost for gold.
Gold was trading around $830 an ounce before Bernanke announced Q1 in November 2008.
All the easy money sloshing around on financial markets burnished bullion’s reputation as a hedge against inflation and as a storer of wealth amid the debasement of paper currencies.
But with inflation showing few signs of re-emerging in developed economies and the dollar strengthening, important factors stopping the gold price from sliding lower have now been removed from the equation.
Gold is down 26% since the start of the year and looks set to end its unbroken 12-year bull run in 2013.
Image by Javier Cabrio.
Comments
Hussein
Gold Resistance 1262$ and Support 1237$
Gold future trading lower since last US session , now if it click support and manage to stays below this level then it may hit till 1230-1221$. In case if it future price click to resistance and manage to stays above this level then expect gold price to fire up to 1270$ – 1282$
overall gold price looking weak