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The Bears Remain Stubborn, But The Pain Is Increasing

Commentaries & Views

Gold continue to push higher with the $1,220 level in sight. On Friday we suggested that the bears were at risk and Powell’s somewhat dovish stance created a small stampede through a tiny door.

With the December rate hike now in question and the September increase fully priced in, the dollar took it on the chin and the move grew in momentum as trade tensions began to soften. The announcement of the agreement between the U.S. and Mexico added to this psychology yesterday. We think the dollar reversal, although expected from an overbought position, is premature and strength in the dollar may emerge after Labor Day. A deal with Mexico is one thing, but China is another story.

The momentum for gold remains higher, if we can hold the $1,212 level, on a close basis. The trade remains heavily short and a break above the $1,220 line may accelerate short covering. Of the entire metals group, silver remains the best value for the bull camp.

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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