Gold investor? Watch the fiscal situation in the US closely

Published: 14 January, 2013 13:21

Gold trader eggWhile many currency traders have kept a watchful eye on the economic data coming from the Eurozone, commodities traders have been carefully considering their positions in regards to the current domestic fiscal situation in the United States.

This has been especially important for gold investors as they scruinised the Federal government’s stance on the debatable spending and budgetary concerns so recently highlighted by the so-called “fiscal cliff”.

This week’s modest increase in gold prices seems to reflect a more pronounced risk appetite for online commodity traders. Should the fiscal problems in the United States be alleviated, it is likely that a fresh influx of capital will be injected into industry which will include precious metals.

Conversely, should a deal not be made, many commodities traders will look to offset any risks by purchasing gold as a safe haven investment. This week should prove rather interesting as many traders may choose to adopt short positions on the prospect of a modest rally in gold.

Online commodity traders have likewise been keeping a close eye on oil prices with particular attention to the completion of the much anticipated Seaway Pipeline. This project’s fruition means that oil can now be transported from mid-western suppliers to refineries on the west coast.

This increased demand and ability to transport signals for a rise in prices. While this move had steadied oil prices in online trading, this commodity received a slight boost when Saudi Arabia stated that their December reduction in supply had little to do with any attempt to raise the price per barrel but rather signaled a seasonal trend.

There had been previous concern that price manipulation may have occurred due to the continued weakened state of the Eurozone economy. Nonetheless, forecast prices have continued to remain steady and barring a major sociopolitical or economic crisis.

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