Market Nuggets
SP Angel: Gold Headed For Fourth Straight Monthly Loss
Gold is headed for its fourth straight monthly decline in July, the longest such streak since 2013, points out commodities brokerage SP Angel. This has occurred as investors turned to the U.S. dollar as the Federal Reserve remains on a path of monetary tightening, plus global trade tensions flare, the firm adds. As of 9:28 a.m. EDT, Comex December gold was down $2.80 for the day to $1,228.70 an ounce. The metal ended June at $1,266.30. “The precious metal has fallen out of favor as Fed policymakers boosted rates twice this year, and they’re expected to affirm plans for two more hikes at a meeting this week,” SP Angel says. “With holdings in exchange-traded funds shrinking, funds have been building up their bets on further declines in prices.”
By Allen Sykora of Kitco News; asykora@kitco.com
FXTM: Gold May Face Further Losses Due To Correlation With Dollar
Tuesday July 31, 2018 09:45
Gold may face further pressure due to the metals’ inverse correlation with the recently stronger U.S. dollar, says Lukman Otunuga, research analyst at FXTM. As of 9:29 a.m. EDT, spot gold was down $3.80 to $1,217.60, bottoming at just above $1,215, not far from the July low near $1,212 that was the weakest level in more than a year. “The yellow metal has clearly struggled to register any meaningful recovery in recent weeks, despite global trade tensions creating uncertainty and stimulating risk aversion,” Otunuga says. “With the yellow metal likely to remain highly sensitive to the negative correlation against the dollar, further losses may be witnessed moving forward. Investors may be offered a fresh opportunity to send the zero-yielding metal lower this week if the Federal Reserve strikes a hawkish tone and Friday’s U.S. jobs report exceeds market expectations.” Gold’s picture on the technical charts is “heavily bearish,” the analyst says. “A solid breakdown below $1,213 could trigger a decline towards the psychological $1,200 level. Bears remain in firm control below the $1,234 resistance level.”
