Gold Market Showed Broad Strength As 2018 Kicked Off - Insch Kintore
(Kitco News) - While many analysts have been focused on gold’s rally against the U.S. dollar, one investment firm noted that the yellow metal started the year with broad-based strength against the seven most liquid global currencies.
In a report Thursday, Europe-based investment firm Insch Kintore described gold’s first trading month of the year as “interesting and somewhat frustrating.”
The firm’s unique investment strategy uses algorithms that are used to identify tradable trends in spot gold against the U.S. dollar, euro, Swiss franc, Japanese yen, British pound, Australian dollar and Canadian dollar.
In its report, the firm said that at the start of the year, it held maximum long gold positions against all currencies, except the Japanese yen. The firm was flat gold against the yen for the entire month.
“For a brief period, the strategy was within a whisker of an all-time high,” the firm said regarding its positioning at the start of the year.
However, by mid-month, the gold market started to get a “little messy,” as the firm said that it started to go short against some currencies and was net neutral gold. With February kicking off, the firm said that gold's bullish trend appears to be reversing; Insch has established maximum short positions against all currencies but the U.S. dollar and yen.
Insch was bullish on gold against the U.S. dollar the entire month.
According to many commodity analysts, the gold market should continue to outperform the U.S. dollar in the near term. The U.S. dollar has struggled to gain momentum even after what some analysts have described as a hawkish monetary policy statement the Federal Reserve released Wednesday.
While gold prices are down from last month’s 1.5-year high, prices are holding above key critical support levels as the U.S. dollar index continues to trade around its lowest levels in three years.
Currency charts on Kitco.com show that gold has seen its best gains against the U.S. dollar. In second place, gold has gained 0.45% against the Canadian dollar in the first month of the year.
Spot gold prices, on Kitco.com, said shows gold trading at $1,342.40 an ounce, down 0.19% on the day.