Breaking News
Investing Pro 0
💎 Access the Market Tools Trusted by Thousands of Investors Get Started

Gold And The Perils Of Uncertainty

By AvaTradeCommoditiesOct 06, 2016 08:58AM ET
Gold And The Perils Of Uncertainty
By AvaTrade   |  Oct 06, 2016 08:58AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Gold prices plummeted on Tuesday, decreasing 3.3%, breaking a key support level of $1300. A sell-off so considerable hasn’t been seen since the summer of 2015 and much speculation has circulated around the cause of the slump. The commodity has historically been a safe-haven in times of uncertainty as investors seek to increase exposure in commodities and bonds. So why, with such volatility in the market at present, have investors moved away from Gold?

Analysts have suggested that the United States rate decision is central to the commodity’s decline. The Federal Reserve have hinted that an increase in interest rates is imminent. The Fed’s intent is starting to bolster investor confidence in the US Dollar. The inverse relationship between the USD and Gold are apparent; while USD increases, Gold decreases. It may be a prediction of what is to come in December, the market may be getting ready for an interest rate hike.

Speculation in the market around the European Central Bank (ECB) may also have had an apparent effect on the sell-off of the metal. The ECB have hinted they will slow down on their purchase of bonds. The decrease in purchase of bonds may be the first step in ending Quantitative Easing in Europe. President of the European Central Bank Mario Draghi has repeatedly suggested that Quantitative Easing will start to come to an end in 2017.

Gold prices could continue to be volatile in the final months of 2016, we may see the precious metal’s price quickly increase; uncertainty will increase as the November United States Presidential Election nears. Furthermore, if Janet Yellen and her colleagues decide to hold off on a rate hike until 2017, the result could be a rise in gold and decline in the valuation of the US Dollar. As Europe approach a post- Brexit economy, contagion has spread and uncertainty over Europe’s future is on every investor’s mind. Gold may be a welcome shelter in a storm of unpredictability.

Gold And The Perils Of Uncertainty

Related Articles

Gold And The Perils Of Uncertainty

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email