Opinion with Peter Hug
Gold Feels Very Unsettled
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Gold rejected the $1,200 level Wednesday and rejected the $1,180-ish area overnight. The market seems unsettled and we suggest the risk rests with the bears. The bounce overnight was the result of some profit taking and value buying ahead of Fed Chairman Powell’s speech to central bankers later today. The market’s conflict comes from the U.S.-China trade war and the Turkish currency crisis on one hand, which has created flows into the dollar and has been gold negative, and the view that the President’s growing political issues may derail the equity market. There is also growing disagreement within the Fed on much how much more tightening is needed. Fed Chair Powell is the primary hawk and today’s speech will be dissected for any signs that the he is concerned about the effects on U.S. growth from any of the bigger macro issues. The “book” on the spec side remains heavily short and the weekend lies ahead. Any movement away from Powell’s perceived hawkish position may create a serious bounce for gold. If he stays the course, I would expect selling but in a muted fashion into the weekend, with a downside level of $1,185 - $1,187.