Opinion with Peter Hug
Gold Washes Through Support
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Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Gold struggled to hold the $1,262-65 major support band yesterday, but overnight the stronger dollar proved enough to snap the two-month level. Selling accelerated on the break as technical traders jumped on board. We are under a week away from the Fed meeting in which a 0.25-point increase is baked into the market. The question is whether this weakness in gold is an image of the December 2015 and 2016 charts, where the metals began significant rallies after the rate-increase announcement, or if we are in a different paradigm this time around. The $1,250 level is the next solid support line, with a break here suggesting a move as low as $1,237 initially. The gold price needs to recapture $1,262 on a close basis to stop the bleed.