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Gold and Copper Sink on Fed Taper

by on December 19, 2013 5:11 am GMT
 

The metals seen a volatile session as the Federal Reserve chose to end 2013 with a taper-bang! After signaling a $10 billion taper from their $85 billion monthly program, gold declined to $1,212 (just above price action support) before instantaneously spiking to $1,242 per ounce. Traders eventually faded the move as tapering is fundamentally bad for gold, which is currently trading at $1,219 per ounce.

“We would have expected with QE tapering that the price would’ve fallen away and it hasn’t,” said David Lennox, an analyst at Fat Prophets. With those similar with trading these announcements, it is seen that the spike in gold was needed to clear out shorts. It is a small taper, but a step in the right direction and bad for gold and inflation prospects.

Silver declined after hitting price action resistance of $20.30. The rally in silver was quickly halted, and the precious metal fell to $19.54, currently.

Copper has declined hard as the dollar strengthened. Copper fell from $3.2228, and is currently down .47 percent in early Asian market trade. “The strong dollar after the Fed’s decision put downward pressure on copper,” said Hwang Il Doo,  senior trader at Korea Exchange Bank Futures Co. Copper fell as much as .6 percent to $7,226 per metric ton, and “there was some selling after price failed to rise above $7,300,” said Hwang.