Make Kitco Your Homepage

Commerzbank: gold prices correcting lower after sharp run-up

Kitco News

Profit-taking set into the gold market after its sharp run-up early Monday, with prices correcting lower since, said Daniel Briesemann, analyst with Commerzbank. Spot gold soared to a seven-year high of $1,687.90 an ounce early Monday as the coronavirus continued to spread around the world and U.S. equities sold off dramatically. “That said, profit-taking [in gold] then ensued towards the evening and is continuing this morning,” Briesemann said. “Gold has fallen to a good $1,630, putting it almost $60 below yesterday’s high.” Spot metal since has bounced from Tuesday’s low, but as of 8:34 a.m. EST, was still down $8.10 to $1,651.30 an ounce. Gold in euro terms fell from a record high of around €1,560 Monday to around €1,500 on Tuesday. “From a technical perspective, gold was overbought as measured against the Relative Strength Index, and the latest price surge since the beginning of last week appeared overheated,” Briesemann added. “Reports from the U.S. that a company there is currently trialing a vaccine against the virus (with results expected in July/August) are contributing to the correction.”

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

 

Bannockburn: 'gold' s five-day rally is at risk'

Tuesday February 25, 2020 08:57

Gold’s five-day rally on coronavirus fears is “at risk,” said Marc Chandler, managing director with Bannockburn Global Forex, LLC. “Yesterday's bloodletting in global equities has calmed, but investors remain on edge,” he said. “Despite all the concerns that the markets were under-appreciating the implications of the new coronavirus, there is a sense that yesterday's moves were in excess.” Japan’s stock market, which was closed Monday, fell Tuesday in a catch-up to the tumbles elsewhere. However, a number of other Asian markets stabilized, including South Korea, Hong Kong and Singapore, Chandler said. The futures for the Dow Jones Industrial Average are around 128 points higher ahead of the open on Wall Street, and oil prices are slightly higher after a big tumble Monday. Meanwhile, spot gold was down $8.10 to $1,651.30 an ounce as of 8:34 a.m. EST and earlier was down even farther at $1,635.55, well below Monday’s seven-year high of $1,687.90 an ounce. “Gold' s five-day rally is at risk,” Chandler said, adding that the metal “closed yesterday's gap” on the charts.

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

 

TDS: risk of pullback in gold prices 'remains very elevated'

Tuesday February 25, 2020 08:57

As gold continues to back down from Monday’s seven-year high, TD Securities said the risk of a pullback in a bull market was “elevated.” Prices rose sharply early Monday on increased fears about the impact of the coronavirus on the global economy, and the most recent Commodity Futures Trading Commission data showed that bullish positioning ingold futures surged by 22% in the week to Feb. 18. Gold benefited from safe-haven flows into gold Monday as equities sank and markets were factoring in monetary easing, TDS said. “A massive appetite for safe-haven assets has helped push the yellow metal's positioning into extreme territory — the market has nearly never seen as many traders long as it has today,” TDS said. “We reiterate that we see a structural bull market in precious metals, but we caution that the risk of a pullback remains very elevated at this juncture. Notwithstanding, today's Comex options expiry may anchor gold prices to the nearby $1,650/oz range, which holds sizable open interest.” As of 8:34 a.m. EST, spot gold was down $8.10 to $1,651.30 an ounce.

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.