Gold prices extended the gains last week, as concerns over the outlook for global growth and rising fears that the US economy is losing more momentum, which spread pessimism across global financial markets and increased demand for safe assets, which boosted gold prices and sent them above $1880 an ounce.
Concerns over the outlook for global growth intensified last week after data from the United States signaled the economic recovery was losing pace, where data from the housing, labor, and manufacturing sectors signaled economic activities continued to slowdown, which spread a huge wave of pessimism over the outlook for growth in the world’s largest economy.
Gold prices are most likely to continue their bullish trend over the coming period, especially since the level of uncertainty remains unusually high, as beyond the debt crisis in Europe, the uncertainty surrounding the outlook for global growth is also very high, and that should further boost demand for safe havens including gold.
Important data will be released this week from the United States, where the ISM Services will be released for the month of August, and expectations signal that economic growth slowed down further, and should that prove to be right, we expect gold prices to extend the rally this week.
Complied by Mitesh Rasaikar, CEO (Marketing & Finance), Maya Iron Ores
