The US economic data showed mixed results in the back-to-date period. The data released this week on durable goods orders showed a rise of 0.1% while new orders for core durable goods viewed as a gauge of business spending plans rallied up by 1.5%. Similarly, the unemployment claims released yesterday showed that the unemployment benefits dropped by 5000 to 305000 last week. The GDP in the previous quarter showed 2.5% gains and estimated growth for second quarter is 2.6%. The unexpected refrained decision of Federal Reserve from reducing the pace of monthly bond purchases shocked the investors.

The House of Congress which is on a way to forward the fiscal budget in the next FY 2013/14 starting from October 1st is debating over raising the debt limit and contradicting over the Obamacare. The Congress has not still passed on the budget. The gold prices are seen inverse to the tapering of QE expectations. The unemployment claims reduction showed expectation of the Fed to taper the stimulus and consequently hit the gold prices down. On the other hand, the fiscal impasse and its lack of agreement have supported the upward of gold prices. The investors are on a dilemma at the current situation. Both the monetary and fiscal measures are pulling over the gold prices towards their regions.

The gold prices which had risen yesterday on fiscal news have today decreased on US unemployment claims reduction. The two opposing forces working on the commodity market have made the investors trade on the short positions. They are still not confident to take a long position. There are several reasons as seen in the present context affecting the commodity prices. The expectation of the reduction of the assets purchase program, the new Fed Chairman Jannet Yellen, the not resolved consensus on raising the debt limit, the decrease in the speculation, the rise in the demand for bullion gold in the Asian Economies and the improving of the Chinese economy and its global trade can be regarded as some of the factors affecting the commodity prices mainly gold.

 Considering the gold as the hedge against the inflation and the reliable source of return on investment, has down turned the investors’ sentiment as the gold has dropped down and other investment areas are not much lucrative. So, will the investors wait for the gold to rise or search and transfer their investment to other sectors?