Opinion with Peter Hug
The Bears Remain Stubborn, But The Pain Is Increasing
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold continue to push higher with the $1,220 level in sight. On Friday we suggested that the bears were at risk and Powell’s somewhat dovish stance created a small stampede through a tiny door.
With the December rate hike now in question and the September increase fully priced in, the dollar took it on the chin and the move grew in momentum as trade tensions began to soften. The announcement of the agreement between the U.S. and Mexico added to this psychology yesterday. We think the dollar reversal, although expected from an overbought position, is premature and strength in the dollar may emerge after Labor Day. A deal with Mexico is one thing, but China is another story.
The momentum for gold remains higher, if we can hold the $1,212 level, on a close basis. The trade remains heavily short and a break above the $1,220 line may accelerate short covering. Of the entire metals group, silver remains the best value for the bull camp.