Gold Futures Remain Near Lower End Of Range As Dollar RisesBy Allen Sykora of Kitco News
Tuesday August 30, 2016 08:12
(Kitco News) - Gold futures remain near the lower end of their recent trading range Tuesday morning as the U.S. dollar strengthens and traders continue to ponder when the Federal Reserve might hike U.S. interest rates again.
As of 8:01 a.m. EDT, Comex December gold was $3.90 lower to $1,323.20 an ounce. This leaves the contract not far above Monday’s two-month low of $1,317.20. December silver was down 2.4 cents to $18.835.
Meanwhile, the euro was down to $1.11648 from $1.11863 late Monday.
The gold market seems to have steadied for now in the roughly $1,320 area, said Robin Bhar, metals analyst at Societe Generale.
“Obviously, we have seen some weakness in the last few days or week, with speculation that the Fed may look to tighten interest rates sooner than later,” he said. “That has rallied the dollar post-Jackson Hole (Fed symposium), and gold is under a little bit of pressure.”
Federal Reserve Vice Chairman Stanley Fischer again cited an improving U.S. economy Tuesday, telling Bloomberg TV that the U.S. “is very close to full employment.” He did not comment on the timing of the next Fed tightening, saying this depends on the economic data.
London markets reopened after a holiday Monday, but gold trading remains subdued, Bhar said.
“Everybody is waiting for nonfarm payrolls on Friday,” said Afshin Nabavi, head of trading at trading house MKS (Switzerland) SA.
Until this and with the approach of month end, he added, much of the activity at the moment is traders squaring positions, Nabavi added.
Nearby chart support for December gold is seen around Monday’s multi-month low of $1,317.20, then the 100-day moving average of $1,302.30.
Moving-average resistance above the market lies at the 10-day average of $1,336.80, the 50-day average of $1,340 and the 20-day moving average of $1,343.20.
In December silver, support lies at Monday’s low of $18.46 and the 100-day average of $18.297. Moving averages above the market include the 10-day at $19.084, then the area around the 50-day of $19.587 and 20-day average of $19.584.