Gold prices recently posted their highest monthly advance in January this year, after a stretch of 36 months. However, the yellow metal has erased all of its gains ,in the month of February. What lies ahead, will the bulls make a comeback or let the bears continue to stay in control of price action?
There are some major factors that will decide the fate of the prices in the short to medium term, which are worth a discussion at the moment.
First thing first , the trader fraternity is closely watching the developments from Greece where the new government is still in negotiations with the Eurozone leaders to buy some time, that might save it from a default on its debt and lead to its exit from Euro. In the absence of any timely negotiations or a scenario where it is forced out of the Eurozone , the yellow metal may see inflows on the back of its safe haven appeal, that can take the prices higher and vice versa. Meanwhile , if the Euro continues to decline against the dollar, the way it has been plunging in the recent past, it will make it all the more difficult for gold prices to hold ground. Continue reading