Tuesday September 9, 2014 11:22 AM

The combination of a stronger U.S. dollar and Ukraine-Russia truce have pressured gold lately, and the market has moved toward the lower end of its trading range around $1,240 an ounce, which could be a key level, says optionsXpress. “Failure to hold here suggests prices could test support at the $1,200 level, which is a very important price point, both technically and psychologically,” optionsXpress says. “If prices rebound here, gold could very well see a continuation of range-bound trading for the foreseeable future. The RSI (Relative Strength Index) indicator is showing oversold levels, which could be supportive in the near term.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

Technical Charts Suggest Gold Bears Hold Near-Term Advantage – Walsh Trading

Tuesday September 9, 2014 8:12 AM

The recent price weakness suggests that gold bears have the overall near-term technical advantage, says Walsh Trading, with a two-month downtrend is in place on the daily bar chart. Looking at December gold, “bears' next near-term downside breakout price objective is closing prices below weekly technical support at $1,253.10, and below there at $1,239.10,” Walsh says. Bulls need to produce a close above weekly technical at $1,286, and then up at $1,304.90, the firm says. For December silver, support is down at $18.92, and below there at $18.70. Resistance is up at $19.46, and above there at $19.78.

By Debbie Carlson of Kitco News; dcarlson@kitco.com

 

Lack Of 'Conviction' Leaves Gold Trapped In Range – MKS

Tuesday September 9, 2014 8:10 AM

Gold prices are holding near the bottom end of the current trading range, with traders having “little conviction” regarding the outlook for the yellow metal, says MKS. “Friday's soft (U.S. nonfarm) employment report and gold’s subsequent and varying reactions really convey the attitude market participants have to the yellow metal right now - one of little conviction. As has been the case for most of this year, price moves both higher and lower run quickly into an exhaustive state with the attitude of specs remaining transient and changeable from one day or week to the next,” they say. The firm says Friday’s U.S. jobs data hasn’t changed the view regarding the U.S. economy or Federal Reserve expectations for monetary policy direction, so it has given traders little reason to support gold prices. “Similarly though, it shouldn't offer much downside, all other factors being equal. So that leaves other drivers - such as a strong U.S. dollar, dampened geopolitical risks, positioning, technicals and momentum - as gold's guiding force over the remainder of the week,” they add.

By Debbie Carlson of Kitco News; dcarlson@kitco.com

 

US Dollar, Treasury Yields Continue To Rise – BNP Paribas

Tuesday September 9, 2014 8:10 AM

The U.S. dollar and U.S. Treasury yields continue to rise this week despite Friday’s weaker nonfarm payrolls report, says BNP Paribas, and the pattern my persist considering there are no new U.S. data until Friday’s retail sales release on Friday and next week’s Federal Open Market Committee meeting. “There has been some focus this week on a San Francisco (Federal Reserve) research paper noting the disparity between current market pricing for Fed policy tightening and the higher track suggested by the FOMC’s own central tendency. The gap in pricing is already well-known to market participants but the Fed report may have helped return market focus to the extent to which US front-end rates are subject to upside risks,” BNP says. Higher interest rate yields can weigh on gold since the metal offers no yield. Analysts at Brown Brothers Harriman point out the information from the San Francisco Fed is not new, and the FOMC will update its forecasts next week. “This divergence is understandable,” BBH says. “As we have argued that while all Fed presidents are free to express their opinions, the key to understanding Fed policy is to watch the leadership.”

By Debbie Carlson of Kitco News; dcarlson@kitco.com