YEREVAN, February 11. /ARKA/. Gold prices climbed early last week as investors were getting more reluctant to take risks amid controversial economic records from the US and eurozone as well as renewed concerns around financial and political situation of the latter.

Later last week the gold prices reached a new two-week maximum benchmark of 1,685.22 USD per troy ounce.

Nevertheless, a new volatility wave in the US trading session hit investors on Thursday. Indeed, at the beginning of the trades, the precious metal prices upped as US released weaker than expected statistics on initial unemployment applications. However, the gold quotes faced pressure amid USD strengthening as Mario Draghi stated risks for economic activity and price stability slowdown became higher amid euro hike.

At the week’s out gold quotes were still pressured as US and China released optimistic foreign trade statistics, and EU leaders reached an agreement on the 2014-2020 EU budget. As a result, gold prices rose by 0.09% to 1,668.45 USD per troy ounce.

This week gold quotes are likely to fall amid the world’s optimistic macroeconomic situation and investors’ inclination to risk. However, we don’t exclude the scenario where gold quotes may consolidate amid quiet trades because China’s markets will be closed for Lunar calendar New Year celebrations ( from 10 to 17 February). Emergency around Spain and Italy also keep the investors alarmed. Mario Draghi’s speech in Madrid and his meeting with Spain’s PM will be in the limelight of the investors.

The gold dynamics will also depend on the US and eurozone macroeconomic statistics. Of the American news we should highlight retail trade and industrial output records for January, preliminary figures on confidence indicator from University of Michigan for February and the number of primary unemployment allowance applications for the last week. Of the European news we should focus on 4 Q preliminary GDP of eurozone, December trading balance, ECB monthly report. Moderately optimistic statistics from overseas and weak records from eurozone will pressure the gold quotes.

Gold quotes may continue dropping to 1,657.0 and 1,652.0 USD per troy ounce in February and March respectively. After reaching these benchmarks, the gold quotes are likely to climb. The resistance benchmark this week may be 1,677.0 USD per troy ounce.

Copper prices dropped by 0.67% to 3.7575 USD per pound last week amid strong USD and renewed concerns around eurozone financial stability.

However, foreign trade and consumer inflation records of China cast optimism on copper quotes at the end of the week. The increased reserve of this asset at London Metal Exchange also prevented hike in copper quotes.

This week copper quotes are likely to consolidate amid limited activity of investors as the physical demand in Asia shrinks due to New Year celebrations in China. The copper dynamics will also depend on US and eurozone news, such as US industrial statistics and eurozone’s 4Q GDP. We expect this statistics will show some drop in figures, therefore, copper quotes may fall.

However, if the statistics is better than anticipated, copper cost may hike. The forecasted fluctuation range may be 3.70 – 3.80 USD this week.

Mikael Verdyan, an analyst at FOREX CLUB, specially for ARKA news agency.
The opinion of the author does not necessarily reflect that of the agency.—0-