(H/T Gold Silver Worlds)
The price of gold rebounded from its 15-month low last week to see its biggest weekly gain in four months. After failing to break below a key support level at $1180 an ounce the price of gold rallied higher for the first time in a long while last week, with gold bouncing $32 (2.7%) to close out the week at $1223 an ounce.
The price of the yellow metal has begun this week on a firmer note as prices extend last weeks’ gains. At the time of writing the price of spot gold was trading at $1233 an ounce after pushing through $1230 an ounce on Monday and hitting a four-week high as traders covered short positions while some bargain hunters stepped in to buy at the current low levels.
Meanwhile global equities have fallen. The Standard & Poor’s 500 Index experienced its worst three-day loss since 2011 as it fell an additional 1.6% on Monday to 1,874.82 at 4 p.m. in New York, the lowest since May and closing below its 200-day moving average for the first time since 2012. The Dow Jones Industrial Average lost 1.4% to a six-month low. Brent crude tumbled 1.5% after sliding into a bear market last week. The dollar weakened against most of its 16 major counterparts and gold gained 0.7%.
The S&P 500 has fallen 6.8% from its Sept. 18 record as the Fed contemplates when to raise interest rates. The index is down 4.8% over three days, the most since November 2011.
The International Monetary Fund cut its forecast for global growth last week and said the euro area faces the risk of a recession.
The IMF now expects world growth to register at 3.3% in 2014, down 0.1% from its forecast in July. For 2015, it also slashed its forecast by 0.2% to 3.8%.
The organization, which represents 188 countries, now expects world growth to come in at 3.3% in 2014, down 0.1% from its forecast in July. While in 2015, it expects growth of 3.8%, down 0.2% from earlier expectations.
It comes less than a month after the Organisation for Economic Co-operation and Development (OECD) slashed its expectations for the global economy because of concerns about a stuttering recovery in the U.S. and the continued fragility of the euro zone.