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Gold Feels Very Unsettled

Commentaries & Views

(Kitco News) - Gold rejected the $1,200 level Wednesday and rejected the $1,180-ish area overnight. The market seems unsettled and we suggest the risk rests with the bears. The bounce overnight was the result of some profit taking and value buying ahead of Fed Chairman Powell’s speech to central bankers later today. The market’s conflict comes from the U.S.-China trade war and the Turkish currency crisis on one hand, which has created flows into the dollar and has been gold negative, and the view that the President’s growing political issues may derail the equity market. There is also growing disagreement within the Fed on much how much more tightening is needed. Fed Chair Powell is the primary hawk and today’s speech will be dissected for any signs that the he is concerned about the effects on U.S. growth from any of the bigger macro issues. The “book” on the spec side remains heavily short and the weekend lies ahead. Any movement away from Powell’s perceived hawkish position may create a serious bounce for gold. If he stays the course, I would expect selling but in a muted fashion into the weekend, with a downside level of $1,185 - $1,187.

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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