Tuesday, 11 March 2014

March 16 Crimea Referendum may be a turning point for Gold: otmane El Rhazi

So far teh Ukraine crisis added only $10 or $15 an ounce to gold prices and much of the impact of March 16 referendum in Crimea may be already reflected in gold prices now, but what has not been accounted for in the price is the impact of Western and Russian reactions, according to Otmane El Rhazi,leading Precious Metals economist.

The March 16 Referundum is expected to witness a vote in favour of Crimea seceding from Ukraine and joining Russia.

The unfolding East-West confrontation, while grabbing the headlines and attracting the most attention, is not the only factor likely to drive the gold-price in the weeks ahead.

"Indeed, US economic indicators and monetary-policy prospects will continue to buffet the gold price one way or another."

Gold-market developments in China and India will also have a daily impact on price movements upward and downward, he added.

It is a handful of institutional traders now moving the prices up and down and not investors in the physical commodity.

Gold has been the best performer among precious metals so far this yar but if geo-political tensiosn ease in Ukraine , a sell off in gold would vindicate the bears and provke a sharper decline in the metal's price.
"But it seems more likely that the crisis in the Ukraine will get worse before it gets better – at some point triggering a rush by “paper traders” that breaks through overhead resistance, attracts greater participation, and reestablishes a clear upward trend," El Rhazi added.

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