The yellow metal was last quoted up 0.3% this morning to $1,269.26 an ounce. December gold was up $2.70 (0.21%) to 1,267.70 an ounce on the Comex.
Two-and-a-half-month gold price lows were caused by a stronger U.S. dollar, bullish stock markets, and slumping physical demand in Asia. Gold dropped 2.7% in July. It broke through the $1,300-an-ounce threshold on Aug. 6 but fell back under on Aug. 15 to finish out the month with only a slight gain.
The one major force that's prevented gold prices from dipping even lower has been the rampant geopolitical tensions between Russia and Ukraine, Gaza and Israel, and the incursion of the Islamic State in Iraq and Syria (ISIS) into Iraq. Gold - a safe-haven investment - tends to see gains when fear rises.
"Given there was little physical demand and shrinking investor consumption in August, geopolitical headlines were supportive with little other reason to keep bullion underpinned and maintain that 1,275/80 support last month," VTB Capital analyst Andrey Kryuchenkov said to Reuters. "The market is bearish and we shall see a lot of technical selling now that we have closed below $1,275."
Geopolitical conflicts are exactly why gold prices eased off Thursday's sharp fall. Reports from Ukraine of a ceasefire between separatists, Russians, and Ukrainian soldiers hit headlines this morning.
"Mutual understanding was achieved concerning the steps which will enable the establishment of peace," the Ukrainian presidential press office said.
Shortly after, the Kremlin released a contradictory statement that denied any truce. The confusion sparked buying in the safe-haven metal.
U.S. President Barack Obama in the meantime sent an additional 350 troops to defend the U.S. embassy in Baghdad, following reports that ISIS militants beheaded a second American journalist in the region.
Looking ahead to the rest of 2014, gold investors can expect a surge in gold prices during the fall months...
September is historically gold's best month - it's chalked up an average price gain of 3% over the last two decades. And November has proven to be nearly as good, with an average 1.8% gain.
Festivals like Diwali in India and the New Year in China spark buying during the fall months in those two populous countries - which together account for more than half of the world's gold demand.
In India, the upswing is already underway. Premiums have jumped over the global benchmark, from last week's levels of $4 to $5 an ounce, to $13 an ounce over the global benchmark.
Related Articles:Tags: current gold price, Current Gold Prices, December gold, gold futures, gold market, gold news, Gold Price, gold price news, gold price today, Gold Prices, Gold Prices Today, gold spot price, price of gold, price of gold per ounce, price of gold today, spot gold, todays gold prices, what gold did today, what the gold price did today
The post Why Gold Prices Today Are Rebounding from an 11-Week Low appeared first on Money Morning - Only the News You Can Profit From.