Gold Prices Continue to Fall over European Debt
The price of gold rose steadily this year, but has since falling to the same level as early January. Europe’s debt crisis isn’t going away, and political instability is on the rise in many countries. France has a new socialist government, Italy recently replaced theirs, and Greece’s parliament is deadlocked without a coalition ruling party.
June gold futures dropped 1.5% to $1,560 and spot gold prices dropped 1.4% to $1,556.
Initially gold had rose steadily in 2012 due to record low interest rates in Europe and the United States.
Gold had rallied amid record-low interest rates from Europe to the U.S. The Federal Reserve has promised to keep rates at “exceptionally low levels” until late 2014.
Gold prices have been floating below its 200-day moving average for several weeks now. This is a sign to technical traders that the price of gold can still fall further down. Gold call options betting on higher gold prices are at the lowest level since December 2008.
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