Opinion with Peter Hug
Gold Resumes Downtrend After Dead-Cat Bounce
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Traders hoping for a sustained bounce off the $1,220 support line were met with continued selling throughout the Asian and early European markets. It is beginning to feel like a capitulation event but we prefer to await the options expiries tomorrow. From these current levels, it will not be difficult to test the $1,200 strikes, but here, we would suggest a more robust bounce should be expected. The stronger dollar and sheer frustration and resignation on the part of the bulls continue to be the primary driver for lower prices. Physical buying has increased noticeably in gold and should silver find the $14 handle, we expect volumes to accelerate for the white metal, with increased premiums for physical product as surpluses dry up. The $1,220 area now becomes first resistance for gold. We see some support at $1,207 and then the $1,200 figure.