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This Is Gold's Most Important Pressure Point This Year - Analyst

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This Is Gold’s Most Important Pressure Point This Year — Analyst

(Kitco News) - Gold prices are going up this year and the U.S. dollar will be the yellow metal’s primary driver, said one precious metals expert.

“Which way the dollar moves … will be key for gold,” partner at Vertical Research Michael Dudas told CNBC on Wednesday. “[The U.S. dollar] has been the most important pressure on gold prices that we witnessed over the last few months.”

Dudas sees the U.S. dollar bottoming here, which will be very beneficial to gold prices. “From a longer-term perspective, gold prices have improved by $150-$200 over the last 12-15 months, while the dollar already peaked in late 2016 - early 2017,” he said.

This week, the markets have been dealing with a lot of jitters amid another Federal Reserve rate hike announcement on Wednesday and fears of trade war escalation.

At the end of the day, the outcome looks beneficial for gold, according to Dudas, who sees prices climbing all the way up to $1,400 this year. The expert’s near-term gold level also looks very promising, ranging between $1,350-$1,355.

The yellow metal has been stuck in the narrow trading range these past few months and traders have been anxiously awaiting a move in either direction.

Gold prices even disappointed in the beginning of February, when equity markets went through a correction but the precious metal failed to rally as much as expected.

“It has, I think, been a little bit frustrating for some of the gold bugs,” Dudas pointed out. “In this range of $1,320-$1,340, it's been kind of in a tight range, which again in these days relative to the equity market and bitcoin, is a pretty safe haven.”

Gold prices saw an uptick following the Fed rate hike on Wednesday and were able to hold firm throughout the day on Thursday. As Asian markets opened early on Friday, the precious metal began a modest climb, with spot gold on last seen at $1,335.30, up 0.49% on the day. 

Live 24 hours gold chart [Kitco Inc.]

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