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Gold Bulls Concede To Dollar Strength

Commentaries & Views

(Kitco News) - As we discussed over the past week, gold’s lethargic pattern was suggesting risks to the downside. The inability to break above the $1,322 area, coupled with a resurgent dollar, caused bulls to exit the trade. On Friday, gold had the chance to remain in an uptrend, flirting with the $1,322 area, while the euro was attempting to regain the 1.22 euro/dollar level. Both levels failed and when gold lost the $1,307 area early yesterday, stop-loss selling accelerated.

The technical damage will require a close above the $1,305 level to resume the uptrend. For traders, a quick long at $1,287, with a tight stop at $1,282, may be a quick trade but strength may be met with further liquidation as the market just looks tired. Geopolitical risks remain, but the focus is on dollar strength and with yields continuing to widen between the U.S. and Europe, the current dollar rally may still have some legs.

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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