Opinion with Peter Hug
Gold Looking For A Base
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Gold prices continue to be hemmed in a relatively tight range. Earlier in the week, we suggested that gold’s momentum, after the Fed rate increase last week, had the potential to break the metal to the upside but that further dollar weakness would be necessary to break the key $1,357 level. Technical traders sold heavily at resistance, as the dollar staged a reversal and some fundamental worries began to recede. The administration’s tough tariff proposals on steel and aluminum have faded away with the granting of exemptions to countries that accounted for about 85% of imports. Negotiations with China are ongoing and a major trade war between the two countries seems to be diminishing. North Korea’s Kim Jong-un visited China this week, the first time he has ever left his country. Speculation is that the Chinese may barter a deal between the U.S. and North Korea on the nuclear issue. But this remains speculation and a flare-up could occur overnight, as could a deterioration of trade talks with China. Issues with the equity market continue to overhang the market and we are going into a long weekend. Gold should hold the $1,322 level today, but a break suggests a test of $1,315, with possible upside potential to the $1,337area.