Gold Continues To Search For Direction
(Kitco News)- Goldcontinues to be caught in aseries of crosswinds. Financial risks in Europe continue to grow as politicaluncertainties in Italy and Spain dominate the headlines. The euro remains underheavy selling pressure, as traders perceive the ECB may delay plans to unwindtheir quantitative easing policy, as the Fed continues to tighten. Elections inItaly are likely to be called for late summer or early fall and in Spain anon-confidence vote may happen as early as Friday. The growing populistmovements in Europe may once again bring into focus the viability of an EUmembership with younger voters. Gold buying has picked up in Europe over thepast few weeks, as the metal has appreciated in euro terms but the trendremains conflicted in North America. The on-again North Korean summit, thestrengthening dollar and yield differentials continue to be headwinds for goldprices in U.S. dollars. The contagion risk to the U.S. financial system fromcurrent events in Europe remains slight in the short term but has the potentialof being disruptive of the Italian and Spanish votes become a referendum on theEU. We continue to advise holding a percentage of the portfolio in gold. Fortraders, the whip-saw action remains challenging. The momentum indicators areneutral. Technically, we need a break above the $1,307 level and support setsup initially at $1,292 and then again at $1,287.
Contributing tokitco.com
Follow @KitcoNewsNOW
newsfeedback@kitco.comwww.kitco.com 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.