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Gold Has Given Up Half Of Its Gains From Rally That Started In 1999 – Barclays

Gold prices have managed to attract some modest buying interest Tuesday, with prices holding above $1,100 an ounce. In a report published Tuesday, analysts at Barclays admit that the market appears oversold in the medium term; however, they add that there is still strong selling interest on upticks. The analysts also note that gold has given up half of its gains in its long-term rally going back to 1999. “The break below the 1131 range lows in gold signals further downside towards our next targets in the 1033/1043 area,” they say.

By Neils Christensen of Kitco News; nchristensen@kitco.com

 

Adrian Day: Reversal In U.S. Dollar Needed To Boost Gold

Tuesday July 21, 2015 08:23

Adrian Day, president and chief executive officer of Adrian Day Asset Management, suggests that now is not the time to sell gold or gold stocks after the yellow metal hit a five-year low Monday and the XAU mining index slid to levels not seen since 2001. “Summer is often a seasonally weak period for gold and gold stocks, with things turning back up in mid-August,” he says. “So right now, in mid-July, things may be at their most depressed. It is often darkest just before the dawn, and, again, this does not seem like the time to sell. This may well be the final rout that has been expected. It would be unrealistic to expect gold and the gold stocks to bounce back to, say, last month’s levels immediately. But, given the seasonal factors, we may not have to wait long for a decent rally, and gold stocks, as we know, can move up and down very fast when they move.”

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

 

Adrian Day: Reversal In U.S. Dollar Needed To Boost Gold

Tuesday July 21, 2015 08:23

Perhaps the single biggest factor that must change for gold to recover is an end to the recent strength in the U.S. dollar, says Adrian Day, president and chief executive officer of Adrian Day Asset Management. The fund manager lists six factors hurting gold lately: an improving U.S. economy raising prospects of an interest-rate hike, strong stock market, muscular dollar, lessening global concerns following another Greek debt deal and nuclear agreement with Iran, news showing less Chinese official-sector gold purchases than the market was expecting and concerns about a slowing Chinese economy. “The most important factor, and, absent a black swan or sharp deterioration in another of the factors above, the one thing that needs to change to turn gold around remains the dollar,” he says.

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

 

INTL FCStone: Gold’s Relative Strength Index At ‘Extremely Oversold Reading’

Tuesday July 21, 2015 08:23

Gold’s Relative Strength Index has hit an “extremely oversold” level, although this may not necessarily mean an immediate bounce, says Edward Meir, commodities consultant with INTL FCStone. Prices fell to five-year lows during Chinese trading hours on Monday, with the firm adding that sell stops were likely triggered and fresh sell signals kicked in for some funds. “We should note that when markets bounce off their lows and recover going into the close as gold did – somewhat -- on Monday, this is usually a sign of a short-term bottom being put in,” Meir says. “However, in gold’s case, the recovery was not that impressive, leaving us to suspect that we may have more to go despite the fact that gold’s RSI remains at an extremely oversold reading of 23.” While it’s hard gauging where the next support lies, he points out that the 2010 low was near $1,044 on a continuation chart for gold futures. The nearby Comex August contract bottomed at $1,080 Monday.

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

 

HSBC: ‘We Do Not Anticipate Another Dose Of Heavy Selling’ In Gold

Tuesday July 21, 2015 08:23

HSBC analysts say “we do not anticipate another dose of heavy selling any time soon” in gold after the sharp downdraft to start the week. “The severity and concentration of recent selling was unusually strong and we do not expect a repeat,” the bank says. “In addition to the possibility that EM (emerging-market) demand may perk up, we note that silver — a smaller thinner market – managed to pare the bulk of its losses (Monday) and traded positively for part of the session. Also palladium, another relatively small market, cut the bulk of its early losses and clambered back over USD600/oz. Were the gold decline a full bullion-wide cascade lower and the beginning of another major move lower, we do not think these other precious metals markets would have recouped as much of their early losses as they did. This leads us to suggest the possibility that the PGMs (platinum group metals) and silver may bounce on short covering. This could trigger a similar move up in gold. It is our view that the PGMs and silver are also oversold.”

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

 

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