Gold Close to $1200 After Huge Gains

Washington (Dec 2)  Gold has posted slight losses on Tuesday, after posting sharp gains at the start of the week. In the European session, the spot price stands at $1194.33. In the US, there are no major releases on the calendar. Federal Reserve Chair Janet Yellen will speak at an event in Washington.

Gold prices have taken traders on a roller coaster ride in the past few days. On Sunday, gold dropped sharply after Swiss voters rejected a proposal to boost the Swiss National Bank’s gold reserves. Had the motion passed, the SNB would have been required to purchase some 1500 metric tons of gold over five years. Gold prices sank to $1142 per ounce early on Monday, but reversed directions and has posted huge gains, climbing close to 5% on the day. Still, the long-term range for gold remains bearish, as the US economy strengthens and the markets prepares for a rate hike in 2015.

The US manufacturing sector continues to expand, as ISM Manufacturing PMI remained strong in November. The index came in at 58.7 points, close to the previous release of 59.0 points, which marked a three-year high. The positive US manufacturing data stands in sharp contrast to the situation in the Eurozone and China. In the Eurozone, where manufacturing PMIs in France, Germany and Italy contracted. In China, the world’s second largest economy, Manufacturing PMI edged down to 50.3 points, down from the previous reading of 50.8 points.

Source: FXstreet