Make Kitco Your Homepage

Gold sees no serious chart damage yet; and a postulation

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

(Kitco News) - See on the daily bar chart for December Comex gold futures that Monday’s big losses have pushed the yellow metal back into the bottom portion of the recent sideways trading range - after prices hit a seven-week high overnight. Importantly, no significant chart damage has been inflicted on the daily or the longer-term charts. However, bulls need to defend strong technical support at the September low of $1,851.00. A drop below that price level would inflicted serious near-term chart damage to suggest a new leg down in prices.

Here's a postulation for the gold market bulls to ponder: This vaccine news is short-term negative for gold, no doubt. However, could it be that as global economies spring back to life in the coming months and we still have a lot of money in the global financial system and probably more stimulus in the near term, that this vaccine news could end up being longer-term bullish for gold? Could it be that economies will spring back to life faster with the vaccine and thus problematic price inflation becomes even more probable sooner? Remember that inflation is bullish for raw commodity markets, including the metals. Don’t rule this scenario out. This 35-year market watcher is still longer-term bullish gold and silver—and the raw commodity sector. Tell me what you think. I always enjoy hearing from my Kitco readers around the globe.

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.