Gold fell to $1540/oz overnight before recovering to $1615/oz at the end of trading. As is typical with commodities, the spot price temporarily breached its support level of $1580/oz. We can expect to see the gold price consolidate at these levels before rising to new highs. Unsurprisingly, the Dow Jones Index is up 226 points today, after reaching an important support level 2 days ago of 10,600pts. The market can be expected to remain volatile in the short term.
Importantly, whilst there has been a 20% correction in the gold price, the weakness in the AUD has resulted in the gold price in AUD terms falling to just $1650/oz. These are still very good gold prices upon which producers can sell output. Its not over yet.