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Gold's Weakness Suggests Investors Continuing To Raise Liquidity

Commentaries & Views

(Kitco News) - Gold continues to experience pressure as investors generate liquidity in the wake of the global equity shakeout. The bounce in equity valuations yesterday was actually a negative for gold prices, as investors assumed the recent drop was merely a retracement, as with past sell-offs, and jumped back into the equity space. Gold, a proxy for liquidity, came under selling pressure as investors raised cash to average into the equity trade. The dollar has gained, as foreign investors also piled into yesterday’s open swoon, on the indexes. The volatility in the equity space is not over and gold remains a viable hedge. Technically, gold needs to hold the $1,320 area with $1,332 a target for a break higher.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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