By Bahattin Gonultas
ANKARA
Gold prices Wednesday dipped to its lowest point in four-and-a-half years since 2010.
Traditionally regarded as a safe investment, gold prices touched $1,143.88 per ounce at 9:05 a.m., GMT, which is a decrease of two percent at Tuesday’s close.
If Gold prices continue to fall, analysts say $1,140 or $1,100 per ounce will be a strong resistance point where markets may react and start to sell gold.
However, analysts stress if the prices rise, $1,180 per ounce will be another key support for the precious metal.
One of the reasons for the drop is due to the strong U.S. dollar, which increased after the U.S. Federal Reserve’s decided to end its bond-buying program.
Gold received low demand last week also because of the strong dollar, which also rallied further after Japan -- the world’s third-largest economy -- decided to expand its stimulus measures.
On October 31, the Bank of Japan’s board had voted to quicken its pace of quantitative easing.
The Japanese Central Bank will expend the annual Japanese government bond purchases to an annual pace of 80 trillion yen per year from its previous target of 60-70 trillion yen.
Also, investors expected the European Central Bank would take further measures to boost the EU economy, the growth of which has been much slower than the U.S. economy after the recent economic crises.
Separately, Brent crude oil price, the leading global benchmark for oil trading, reached its lowest point in four years Wednesday.
Brent crude oil price reached $81.88 in the morning morning and soon later fell further to $81.78 at 8:35 a.m., GMT.
The increasing value of the U.S. dollar has weakened the purchasing power of oil-dependent countries since oil prices are indexed to the dollar worldwide. Additionally, the shale oil production boom in the U.S. hampered oil import volumes, thus decreasing the global demand.
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