Gold took a serious tumble today, a day filled with news releases regarding Europe’s LTRO (long-term refinancing operations), and commentaries from Bank of England Governor Sir Mervyn King and Fed Chairman Ben Bernanke.
There were other forces at work as well. The European Central Bank sold 7.6 tons of gold last week, very likely as part of a fund-raising move to meet its share of the Greek bail-out contributions. Many hedge funds sold off as well, in order to cover their losses in equity markets.
There is also a rumor that the Chicago Mercantile Exchange will again raise its margin requirements for the precious metal, as they did back in August. Larger margins, of course, mean holders of gold contracts must either make additional deposits on their accounts, or sell off some positions.
So does all this pressure mean our rally is over?
Full article + chart available at ---> http://j.mp/ywDRT7
Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. Forex Capital Markets LLC. will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.