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Price of Gold Outlook 2012

Gold Price Short-Outlook 2012 -Technical Analysis and Major Demand Facts

The price of Gold at about 1,567 USD (July, 12th 2012) is far below its high of 1,895 USD seen in the 5th of September 2011. The demand for gold in the first quarter of 2012 was down compared to Q1 2011. The diminishing demand for gold and the increasing supply can be justified as market prices were 22% higher in Q1 2012 compared to Q1 2011. Many gold analysts believe that gold price correction will end soon and support that now its time to buy gold. From the other hand the strong dollar and the diminishing demand / supply price equilibrium tells another story.

 

 


Gold Price Chart in US Dollars & Euros since 1973

In the following chart the price of gold is expressed in two different currencies (US dollars and Euros). The black line corresponds to the price of gold in US dollars and the blue line to the price of gold in Euros. The time frame starts in the 1st of January 1973 and ends in the first half of July 2012.

Source: Trading Center, Data: World Gold Council and USAgold.com


Gold Price Chart in US Dollars and Moving Average 180 Days since 1999

In the chart below the black line corresponds to the price of gold in US dollars and the blue line to the moving average price of 180 days. The time frame starts in the 1st of January 1999 and ends in the first half of July 2012.

Source: Trading Center, Data: World Gold Council

TCI Indicator on the Price of Gold since 1999

After implementing a simple version of TCI indicator on the price of Gold we present the following chart. ► What is TCI ?

The time frame starts in the 1st of January 1999 and ends in the first half of July 2012. We didn’t show more analysis using TCI on gold as the results produced weren’t signaling any particular trend direction.

 

Source: Trading Center, Data: World Gold Council

 

 

The Demand and Supply for Gold in 2012 (World Gold Council Facts)

“Total Demand for Gold down in 2012 except Demand deriving from Investment Gold”

During the first quarter of 2012 the global demand for gold declined 5% below the level of demand in the first quarter of 2011. The total demand for gold during Q1 2012 totaled 1,097.6 tonnes. The demand for gold in the industries of jewellery and technology was decreased mainly as the price of gold the first quarter 2012 was about 22% above the levels seen in 2011. Demand for jewellery reached 520 tonnes down about 6% in a yearly basis, mainly due to higher price of gold levels. 

Demand for Investment Gold

Investment gold in the first quarter 2012 has seen growth driven by an improvement in demand for ETFs and other similar financial assets. Central banks contributed further to the growth of investment gold in Q1 2012. Demand for imitation coins and medals grew 7% at 26.6 tonnes mainly driven by India. Gold Bar (and original coin) demand was decreased and didn’t sustain the high levels in the first quarter 2011.

Supply for Gold up in the first quarter of 2012

Total supply of gold increased 5% in a yearly basis and reached 1,070 tonnes in Q1 2012. Mine production in the first quarter 2012 grew to 673.8 tonnes. Gold supply from recycling activity increased 11% in a year basis and reached 392 tonnes.

 

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Price of Gold Short-Outlook 2012

Trading Center (2012)

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