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RBC's Gero: Gold Gets Safe-Haven Boost From Weaker Equities

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“Gloomy” global equities have propelled gold to three-month highs as the precious metal acts like a safe haven again, says George Gero, managing director with RBC Wealth Management. Some traders are likely being forced to cover some short positions, he continues. “The fallout of Saudi problems, Italy budget headlines, trade wars and tariffs all weigh on stocks and [are] moving gold, which until recently was losing tonnage in ETFs [exchange-traded funds]. Asset allocators now forced to look at gold as the usual additional alternative to hedge volatility in stocks.” Comex December gold was last up $17.40 to $1,242 an ounce and peaked at $1,243, its most muscular level since July 26. The Dow Jones Industrial Average futures were around 450 points lower ahead of the open on Wall Street.

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

 

MKS: Break Above $1,240/Oz Would Trigger Gold Short Covering

Tuesday October 23, 2018 09:28

A break above $1,240 an ounce could prompt enough short covering to boost spot gold all the way to $1,250, says MKS (Switzerland) S.A. Short covering is when market participants buy to cover, or exit, short trades in which they took out a bearish position. Gold traded as high as $1,239 an ounce so far Tuesday. “Supportive price action remains evident initially around $1,220, while any extension toward $1,210-$1,215 is likely to see resting bids restrict any further declines,” MKS says. “The recent build in short positioning from mid this year sits heavily around $1,240 and any moves toward/through this level should instigate a spate of short covering to potentially push above the psychological $1,250 level.” 

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

 

FXTM: Gold ‘Winning The Battle Of The Safe Havens’

Tuesday October 23, 2018 09:28

Gold is drawing more safe-haven strength than the U.S. dollar at the moment, says Lukman Otunuga, research analyst at FXTM. “Gold bulls hit the ground running this morning as geopolitical concerns promoted risk aversion and accelerated the flight to safety,” Otunuga says. “The yellow metal has scope to shine with intensity this week as the risk-off mood sends investors rushing to any form of safety. However, with the dollar also benefiting from safe-haven flows, there could be fierce competition between the two. Gold seems to be winning the battle of the safe havens this morning….” Normally, gold moves inversely to the greenback. Around 9:15 a.m. EDT, spot gold was $16.65 higher to $1,238.45 an ounce. “A solid breakout and daily close above the $1,233.50 resistance level is likely to inject gold bulls with enough inspiration to challenge $1,245,” Otunuga says.

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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