Opinion with Peter Hug
Gold Bulls Concede To Dollar Strength
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - As we discussed over the past week, gold’s lethargic pattern was suggesting risks to the downside. The inability to break above the $1,322 area, coupled with a resurgent dollar, caused bulls to exit the trade. On Friday, gold had the chance to remain in an uptrend, flirting with the $1,322 area, while the euro was attempting to regain the 1.22 euro/dollar level. Both levels failed and when gold lost the $1,307 area early yesterday, stop-loss selling accelerated.
The technical damage will require a close above the $1,305 level to resume the uptrend. For traders, a quick long at $1,287, with a tight stop at $1,282, may be a quick trade but strength may be met with further liquidation as the market just looks tired. Geopolitical risks remain, but the focus is on dollar strength and with yields continuing to widen between the U.S. and Europe, the current dollar rally may still have some legs.