Gold Bulls Are 'Locked and Loaded'
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(Kitco News) - We are back from our short summer hiatus…and what a week to come back home to. Gold this week hit its highest level in two months and is trying desperately to hit and ultimately break that key psychological level of $1,300.
Speaking with Bill Baruch, chief market strategist for iitrader.com, he said the only thing that might have stood in the way of the metal hitting $1,300 could have been today’s CPI read.
And while the miss in the inflation numbers should have been positive for gold, it prompted some profit taking ahead of the $1,300 mark, leaving many investors disappointed. No celebratory dance yet…. December gold futures rallied to a high of $1,298.10 an ounce; to then fall back slightly, last trading at around $1,295 an ounce.
This now marks the third time since April that gold has been within striking distance of $1,300 an ounce, only to lose momentum at the finish line.
“Think of it as pulling the string on a bow, if you pull too hard and too fast, you can stretch the string and lose all the tension. I think that is what happened. We have now run up to this area three times so it seems like a logical place to take profits,” Ole Hansen, head of commodity strategy at Saxo Bank told reporter Neils Christensen.
While Wall Street has not given up hope of gold breaking through $1,300 in the near-term, interestingly, this time it is retail investors who need to be persuaded a little bit more to join the bullish side. Read the results of the latest Kitco News survey.
Bitcoin is on a tear this Friday, even though Todd ‘Bubba’ Horwitz is not convinced, “[O]nce again [bitcoin] is well overdone; we should see a selloff back to $3,000. The confusion and fear out of North Korea is causing all markets to react, but they shouldn’t be reacting to this news,” he said.
And here’s a Friday flashback for you, can you believe it’s been ten years since the financial crisis? On August 9, 2007, BNP Paribas blindsided the financial world by freezing three funds with exposure to mortgage loans amid liquidity worries. The Dow lost 387 points shortly thereafter.
Wishing you a very good weekend! Let’s see what next week brings.