Opinion with Peter Hug
Fed's Hawkishness May Be Premature
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(Kitco News) -The lower inflation print and U.S. growth numbers on Friday provided the catalyst to push gold higher. Asian buying continued to push the metals complex higher, as traders covered shorts with the view that the Fed’s recent hawkish tone towards higher rates may be premature. The dollar continued its slide on prospects that a September rate increase is becoming increasingly unlikely. Given the continued stalemate in Congress and fading hope for any realistic fiscal policy, at least in the short term, dollar weakness should continue, which will underpin the metals. The bears may capitulate and create more short covering, especially if gold can break up above the $1,237 level, which would set up a test of the $1,250 area. Support resides at $1,230 for gold. Silver continues to see demand and a break above $16.20 suggests $16.45 as the next upside target.