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Gold suffers profit taking

The week gets off to a very quiet start with little in the way of economic data out today which doesn’t help much with the overall lack of volatility as this continual sense of “calm before the storm” endures.  We’ve seen investors of equities become more nervous in recent days with increased calls for a pullback in indices and gold seemed a favoured asset which climbed to sixteen week high last week.  This morning however the precious metal has retreated some $20 in some widespread profit taking and is settling around $1320 at the time of writing.  Such a move to the downside hasn’t been seen for a few weeks and could make bulls a little nervous as they battle against a renewed call from Goldman Sachs for gold prices to hit $1050 by year end.

In the absence of any major economic data eyes will be on the single currency as there is industrial production from the Eurozone this morning and later in the day ECB President Mario Draghi speaks to the European Parliament.  He is likely to want to make amends to last week’s speech he made in London where he was drowned out by FOMC minutes, but it’s hard to see him say much more than he already has, confirming that the governing council is unanimous in being ready to act with full blown QE should it be required.  Either way his focus will be on keeping a lid on further euro gains.

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