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Market of precious metals: where will the trend go?
During the previous trading week the market of precious metals continued its bearish tendency.
The US Dollar was strong versus most global currencies. The EU unemployment rate in November reached 10.1%, confirming the forecasts. The European GDP in the 3rd quarter of 2010 was 1.9% higher, coming up to the expectations. The German trade balance in November made up €11.8B, lower than expected.
The downtrend of gold results from the following macroeconomic peculiarities: the US Dollar strengthens, the US economic recovery accelerates, investors leave the “heaven” precious-metal market for riskier assets (like currencies or stocks), making gold lose in value.
Gold was also undermined by the fears of more complicated speculative activities. Last week the gold sales were suspended by the employment change release. The private sector created only 113k new jobs in December against expected 200K. The only positive thing was a 0.4% decline in the unemployment rate from 9.8% to 9.4%.