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RBC's Gero: Gold Pressured By Dollar; 'Contrarians' Await 'Trigger'

Kitco News

Gold prices have hit their lowest level in a year on a strong U.S. dollar, with those wanting to buy on price weakness waiting for some kind of “trigger,” says George Gero, managing director with RBC Wealth Management. As of 8:47 a.m. EDT, Comex August gold was $2.50 lower to $1,224.80 an ounce. “Gold prices continue [to be] pressured by Fed Chair [Jerome] Powell remarks of better economy with no inflation worries and continued rate hikes, giving [the U.S.] dollar a boost,” Gero says. The potential for more rate hikes is adding to dollar strength at a time when the world is worried about a trade war and geopolitical issues, all of which normally would help gold’s status as a safe haven, Gero says. At some point, the price weakness may attract “contrarians” as buyers, but any rally “needs a trigger and a cowbell to lead this,” Gero concludes.

 By Allen Sykora of Kitco News; asykora@kitco.com

 

Commerzbank: Gold May Test $1,200 But Attract Bargain Hunters

Wednesday July 18, 2018 09:00

Commerzbank analysts say they look for gold to test the $1,200-an-ounce level, although they also look for bargain hunting to emerge at lower prices. The most recent leg lower is the result of upbeat comments on the U.S. economy Tuesday from Fed Chair Jerome Powell, Commerzbank says. Otherwise, analysts have expressed surprise at gold’s multi-week slide due to concerns about a trade war hurting the economy and ongoing geopolitical risks.  “One possible argument for the weak price could be that gold is being sold to offset losses in other commodity sectors,” Commerzbank says. The analysts conclude: “We believe that gold will test the $1,200 mark. Possibly this level will attract bargain hunters, who will halt the price slide.” As of 8:46 a.m. EDT, spot gold was $2.60 lower to $1,224.75 an ounce.

 By Allen Sykora of Kitco News; asykora@kitco.com

 

BBH: U.S. Dollar Retains Bid After Powell Comments

Wednesday July 18, 2018 09:00

The U.S. dollar is strong after Tuesday comments from Federal Reserve Chair Jerome Powell were seen as a sign that monetary tightening will continue at the same pace as markets had expected despite worries about a trade war, says Brown Brothers Harriman. This has ramification for precious metals since they often move inversely to the U.S. currency. As of 8:43 a.m. EDT, the September U.S. dollar index was up 0.286 point to 94.990. “After softening in Europe yesterday, the dollar recovered in the North American session with the help of assurances by Fed Chair Powell,” BBH says. “He reaffirmed the path gradual path despite clear recognition that tariffs threaten wages and growth. The greenback has extended those gains today and is higher against all the emerging-market currencies, expected the Turkish lira, which is slightly firmer.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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