Ignore the Hawkish Fed, There’s Still A Case for Gold - Traders
(Kitco News) - As gold settled lower on what was a volatile week, some traders say they still see potential for the yellow metal.
Despite the weakness seen in the gold market following the hawkish Federal Reserve announcement Wednesday, TJM Institutional Services’ Jim Iuorio and Path Trading Partners’ Bob Iaccino told CNBC they see positive factors for gold.
“I'm a longer-term bull in gold and if you look at the long-term chart the trend is still higher," Iuorio told CNBC Thursday.
The metal fell under pressure Thursday as the U.S. dollar rallied on the Fed’s optimistic message to markets, hiking interest rates by 25 basis points mid-week. August Comex gold futures hit a three-week low this week, last trading at $1,255.30 an ounce.
But, Iuorio said he would expect the weaker U.S. economic data to eventually pull the U.S. dollar lower, which would bode well for gold. As long as the metal stays above $1,235 an ounce, he remains bullish, he added.
To the downside, the trader said he’d need to see a close below $1,230 an ounce to turn bearish.
According to Chicago-based trader Iaccino, there is a fundamental factor supporting the gold market right now.
Speaking on CNBC’s “Future Now,” Iaccino said that the upcoming gold tax in India could be a catalyst to propel jewelers and retail investors to buy gold, which could push prices higher.
Earlier this month, the Indian government announced a 3% Goods & Services Tax (GST) tax on gold that will come into effect on July 1.