Gold prices fell sharply last week, as the strength of the U.S. dollar in addition to rising volatility in gold prices over the past period pushed investors away from the safe haven, where the U.S. dollar gained huge momentum amid rising concerns over the outlook for global growth on signs of slowing economic activities in major economies around the world.
Moreover, the mounting fears from the European debt crisis and the looming default that is facing Greece boosted demand for lower yielding assets including the U.S. dollar, and while that usually would support gold prices, yet traders opted to stay away from gold, as recent volatility in gold prices diminished its appeal as a safe haven, which weighed down heavily on gold prices last week.
This week the focus will remain on Greece with the troika expected to return to finalize the review after the suspension of the mission and it will provide the insight whether Greece will get the bailout funds in October. Therefore, investors will watch closely the developments and hope for any comments from the mission to ease the tension.
Still, the fear of recession is evident and we hope that the data from this week can ease the pressure with the dollar still enjoying the upper hand. The important data are from the United States and with the upside revision to the GDP, the Income report, and the expected expansion in the manufacturing activity the market can find the room for the correction yet amid overall negativity.
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