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INTL FCStone: Relative Strength Index Suggests Gold 'Overbought'

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Gold’s run higher is continuing but a technical indicator is flashing that the metal could be overbought in the short term, says Edward Meir, commodities consultant with INTL FCStone. As of 9:53 a.m. EDT, spot metal was $12.80 higher to $1,432 an ounce and earlier hit a six-year high. Meir suggests gold could be benefiting from a parallel strengthening in Bitcoin. He downplayed the impact of U.S. sanctions on Iranian leaders since “imposing sanctions against foreign leaders who have no traceable assets overseas are ineffective.” Meanwhile, turning to the technicals, Meir said that “gold's Relative Strength Index is currently at 84, so the complex is quite overbought, while the RSI on the dollar is at 27 and quite oversold. The two are therefore poised to reverse and perhaps we could see this happen post-G20, depending on how developments transpire over there.”

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

 

Commerzbank: ETF Inflows Continue As Gold Prices Rise

Tuesday June 25, 2019 08:55

Gold prices have hit fresh six-year highs as the U.S. dollar remains soft and investors keep moving into gold-backed exchange-traded funds, Commerzbank said. As of 8:48 a.m. EDT, spot gold was $4.50 higher to $1,423.70 an ounce but peaked overnight above $1,438 an ounce. “This upswing was accompanied once again by pronounced ETF inflows, [with] holdings being increased by 4.3 tonnes this time,” the bank said. “The weaker U.S. dollar also contributed to the price rise. The latest U.S. sanctions against Iran have likewise played their part by adding to the uncertainty as to what will happen next in the conflict between the U.S. and Iran.” Further, U.S. President Donald Trump’s repeated attacks on the Federal Reserve are playing a role, Commerzbank added.

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

 

TDS: Gold Remains Underpinned By Rate-Cut Expectations

Tuesday June 25, 2019 08:55

Gold prices have remained strong since Federal Reserve Chair Jerome Powell recently made comments that “provided some validity” to the market's aggressive rate-cut expectations, said TD Securities. “Energy, precious metals and key base metals all rose in tandem amid hopes the Fed will cut rates aggressively into 2020 and as ever louder war rhetoric between the U.S. and Iran generated anxiety that crude flows through the Straits of Hormuz may be interrupted,” TDS said in a weekly commodities report. Gold has moved above $1,400 an ounce for the first time since 2013. “Gold’s biggest challenge will be to sustain the newfound interest from the bulls, as the market has already priced an aggressive path for rates,” TDS said. “Nonetheless, we increased our price target to $1,486/oz, although we think that the path upwards may be a choppy one, particularly if the U.S. continues to print firm data that contrasts with the aggressive expectations for the Fed.”

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

 

FXTM: Current Narrative ‘Should Keep Gold’s Allure Intact’

Tuesday June 25, 2019 08:55

Gold should be able to maintain its luster for a while yet, said Han Tan, market analyst at FXTM. “Having already soared to its highest since 2013, investors will certainly be wondering how much upside is left for gold,” the analyst said. “Gold’s lure has only increased amid intensified fears over the global growth outlook that has been severely dampened by U.S.-China trade tensions that have lasted for nearly a year. The now enlarged scope of the U.S.-China conflict, expanding beyond trade to include the tech sector, along with the displays of brinksmanship that have unfolded in recent weeks, creates a narrative that should keep gold’s allure intact.”

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