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LaSalle's Nedoss: Comex Gold’s Technical Posture Improves

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Gold’s technical-chart picture has improved, and the December futures potentially could challenge the 100-day moving average around $1,238.10 an ounce in the not-too-distant future, says Charlie Nedoss, senior market strategist with LaSalle Futures Group. The most-active Comex contract hit a 10-week high of $1,230 an ounce on Thursday, although it has pulled back some to $1,225.30, down $2.30 for the day, as of 9:43 a.m. EDT. “I wouldn’t be surprised early in the week to see some back and fill,” Nedoss says. Nevertheless, he continues, the market has developed good chart support in the area around $1,203 to $1,204, near a cluster of moving averages. Further, he points out gold this week so far has first taken out last week’s low and is now above last week’s high. If this holds through the close, this would be known as a weekly outside reversal higher, which is considered technically bullish. Plus, the metal is headed for its first close above the 10-week moving average since April, Nedoss says. If December gold can get above the $1,238 area, he concludes, “there is not much resistance above the market.”

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

 

Aberdeen: Gold Would Benefit From More Stock-Market Volatility

Friday October 12, 2018 10:16

Maxwell Gold, director of investment strategy with Aberdeen Standard Investments, says further stock-market volatility and the large bearish position of speculators in gold futures could mean another price rise should those metals traders be forced to buy to exist from their trades. U.S. equities fell sharply Wednesday and Thursday, before getting a bounce in early trade Friday. Investors flocked to so-called safe-haven assets such as gold as the VIX volatility index soared to its highest level since the first quarter. “Given the current negative sentiment and large short positioning in the futures market for gold, further equity volatility could provide the much-needed catalyst by sparking a short squeeze in the short term,” the strategist says. “Historically, periods of elevated VIX levels have favored gold and platinum....” Further, Gold says investors are “underweight” in the metal right now. “Historically, when the S&P 500 suffered a peak-to-trough drawdown of 15% or more, gold has been the clear benefactor...,” he says. “Despite higher U.S. interest rates, this in turn this could help gold resume its current uptrend, which began in December 2015 in alignment with the start of the current Fed tightening cycle.”

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

 

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

Friday October 12, 2018 09:40

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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