Gold Prices Decline In Asian Trading, Approach $1,315 Level
Spot gold on Kitco.com was last seen trading at $1,316.70, down 0.23% on the day.
Kitco’s senior technical analyst, Jim Wyckoff, pointed out that U.S. stock indexes saw gains on Monday and hit new record highs, which served as a negative driver for the precious metal.
Also, higher U.S. Dollar Index, last at 92.34, was working against the yellow metal as well, according to Wyckoff.
But, this downward move might be nothing more than some profit-taking and chart consolidation after solid gains, added Wyckoff, noting that gold bulls “still have the overall near-term technical advantage, amid a four-week-old uptrend.”
Todd 'Bubba' Horwitz, chief market strategist of BubbaTrading.com, described the recent gold surge as a “monster rally of almost $90 over the last 19 trading days.”
Horwitz was not surprised to see gold decline, adding that a test of lows was expected. “We are watching the $1,328 level on a weekly basis. Until gold closes above that level, we will trade it from the short side. We are long-term bullish, short-term bearish,” he said in his commentary.
Other analysts mentioned they are optimistic on gold in the short and long term, noting that investors are choosing to go long on gold.
Head of global strategy at TD Securities, Bart Melek, said that gold could hit $1,357 in the near future.
“Considering that investors seem ready to take hefty long gold positions, even as equity markets are surging, it is quite possible that the yellow metal could attempt to hit $1,357/oz in the not too distant future,” Melek wrote in a research note.
A move higher to $1,375 is “also possible,” according to Melek, if the market chooses to view Federal Reserve’s stance as more gentle when it comes to rate hikes in 2018.
“The lack of inflation, weaker U.S. economic data in the coming months or a slumping USD could all be catalysts for more gold upside,” he said.