Gold Set for Dramatic Fall If Central Bankers Disappoint

Trading close to key resistance level $1,700 an ounce, gold prices [XAU= 1693.75 -0.39 (-0.02%) ] have had a bull run over the past one month, rising 5.5 percent, on expectations of monetary easing by both the U.S. Federal Reserve and the European Central Bank (ECB). Andrew Su, CEO of Sydney-based commodity brokerage Compass Markets, agrees that gold is vulnerable to a “dramatic” downturn as he believes the ECB is unlikely to provide any definitive plans in terms of its bond-buying program. Dhiren Sarin, Chief Technical Strategist, Asia-Pacific at Barclays, says while he expects a temporary pullback in gold in the coming days given the “significance” of the psychological hurdle at the $1,700 level, he is ultimately looking for the precious metal to move higher.