Gold Bulls Concede To Dollar Strength
(Kitco News)- As we discussed over the past week, gold's lethargic patternwas suggesting risks to the downside. The inability to break above the $1,322area, coupled with a resurgent dollar, caused bulls to exit the trade. OnFriday, gold had the chance to remain in an uptrend,flirting with the $1,322 area, while the euro was attempting to regain the 1.22euro/dollar level. Both levels failed and when gold lost the $1,307 area earlyyesterday, stop-loss selling accelerated.
The technical damage will require a close above the $1,305 level to resume theuptrend. For traders, a quick long at $1,287, with a tight stop at $1,282, may be a quick trade but strength may be metwith further liquidation as the market just looks tired. Geopolitical risksremain, but the focus is on dollar strength and with yields continuing to widenbetween the U.S. and Europe, the current dollar rally may still have some legs.
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