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FXTM: Gold Bulls Remain In ‘Driving Seat’ Above $1,213/Oz

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Gold bulls remain in charge of the market’s near-term direction as long as prices remain above previous resistance that failed at $1,213 an ounce, says Lukman Otunuga, research analyst at FXTM. Otherwise, he adds, the longer-term outlook remains bearish. Global risk aversion and a softer dollar sent spot gold to a 10-week high above $1,225 an ounce on Thursday. “Although gold prices are noticeably weaker this morning, bulls remain in the driving seat above the $1,213 level,” Otunuga says. “While the technical outlook points to further upside, fundamentals are still in the bear’s favor. With the dollar supported by safe-haven flows and prospects of higher U.S. interest, the medium- to longer-term outlook remains negative for gold.” Technically, gold turned bullish on the daily charts following a breakout above the $1,213 resistance level, the analyst continues. “Investors may utilize $1,213 as a fresh support to push prices towards $1,228.20 and $1,233.50,” Otunuga says. “If prices unable to keep above the $1,213 [level], gold has scope to depreciate back towards the $1,200 psychological level.” As of 9:13 a.m. EDT, spot gold was $5.45 softer at $1,219.30 an ounce.

By Allen Sykora of Kitco News; asykora@kitco.com

 

Commerzbank: Short Covering Could Add Further Fuel For Gold Rally

Friday October 12, 2018 09:40

Gold posted its biggest gain Thursday since the Brexit vote in June 2016, and short covering could send the market even higher, says Commerzbank. The precious metal added 2.5% Thursday in U.S. dollar terms. “Gold in euros likewise gained significantly, climbing for a time to nearly €1,060 per troy ounce,” the bank says. “The price rise was supported by a weak U.S. dollar and falling bond yields, though we believe gold is likely to have received its biggest boost from short covering.” Data from the Commodity Futures Trading Commission shows that money managers had a net-short, or bearish, position of 79,603 futures contracts as of Oct. 2. “This equates to 247 tons of gold,” Commerzbank says. “If this entire quantity were to be bought back, the gold price would no doubt increase considerably. Perhaps a start was made yesterday. Market participants do at least appear to have become somewhat more risk-conscious again following the sharp falls experienced by stock markets and the associated noticeably higher volatility.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

RBC’s Gero: Gold Retreats As Equities Recover

Friday October 12, 2018 09:40

Comex gold is giving back some of its strong gains from the past two days, during which equities took a beating, with traders now exiting positions in the precious metal ahead of the weekend, says George Gero, managing director with RBC Wealth Management. As of 9:20 a.m. EDT, Comex December gold was $3.80 lower to $1,223.80 an ounce. Gero attributes the pullback to a rebound in the stock market and expectations that the Federal Reserve remains on schedule to hike U.S. interest rates. The metal rose sharply on Wednesday and Thursday amid sell-offs in the stock market. “Event-driven rallies [in gold] usually are short lived as event-driven sell-offs also encounter evening-out trades,” Gero says. “My 35 years on the floor have seen all this before.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

MKS: 100-Day Average Provides Chart Resistance For Gold

Friday October 12, 2018 09:40

The strength in gold prices the last two days took the market near its 100-day moving average, which offers chart resistance, with the metal subsequently pulling back, says MKS (Switzerland) S.A. Spot gold traded to a 2.5-month high of $1,225.40 Thursday, although as of 9:05 a.m. EDT Friday, was down $5.90 to $1,218.85 an ounce. “In Asia today, gold opened at $1,223 and drifted lower with the SGE [Shanghai Gold Exchange] premium softer at $2-3 over loco London,” MKS says. The market later bounced from the lows. “Gold is trading fairly close to the 100 DMA at $1,228. There should be plenty of resistance but a close above that level could signal a move higher,” MKS says. “On the downside, we expect solid buying interest between $1,205-10.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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