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GOLD & OBAMA: A love story

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11/13/2012 | 03:33pm CET

The President of the United States, Barack Obama and gold linked their destiny. The performance of gold metal escapes from criticism (which is not necessarily the case for the politician) with a gain over the last four years of $ 1000, up 140%.

The reasons are simple: a policy of quantitative easing from the Fed. In addition, Ben Bernanke should be maintained with the re-election of the Democratic candidate.
Proof of this common destiny, the net recovery of gold due to results of the U.S. election (profit of more than $ 40 in the trading session). It must say that investors think clearly still difficult economic situation, promoting the application of another quantitative-easing, real catalyst of the gold market. The downside of this policy is the risk of inflation, monetary trouble which causes massive purchases of gold to protect the assets of investors.

It is generally the policy of low interest rates and "easy" money which promotes regular purchases from investors.


                

Evolution of the gold price per ounce since the first election of Barack Obama
with the consolidation phasis for 16 months around the 200-day moving average.

 

Technically to analyze the gold metal, it should monitor its behavior in weekly data. In fact, the gold contract remains locked in a trading range with a neutral zone as lower limit USD 1580 and recent highs for upper limit at USD 1800. Therefore, all fluctuations are only simple movements around the 200-day moving average and are not real mid-term trends.
Nevertheless, we maintain a positive bias that will materialize with the crossing of upper limit, resulting a new bullish trend towards the symbolic area of USD 2000.

 

Patrick Rejaunier
© 4-traders.com 2012
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