Gold Looking For A Base
(Kitco News)- Gold prices continue to be hemmed in a relatively tightrange. Earlier in the week, we suggested that gold's momentum, after the Fedrate increase last week, had the potential to break the metal to the upside butthat further dollar weakness would be necessary to break the key $1,357 level.Technical traders sold heavily at resistance, as the dollar staged a reversaland some fundamental worries began to recede. The administration's tough tariffproposals on steel and aluminum have faded away with the granting of exemptionsto countries that accounted for about 85% of imports. Negotiations with Chinaare ongoing and a major trade war between the two countries seems to bediminishing. North Korea's Kim Jong-un visited China this week, the first time he has ever left his country.Speculation is that the Chinese may barter a deal between the U.S. and NorthKorea on the nuclear issue. But this remains speculation and a flare-up couldoccur overnight, as could a deterioration of trade talks with China. Issues withthe equity market continue to overhang the market and we are going into a longweekend. Gold should hold the $1,322 level today,but a break suggests a test of $1,315, with possible upside potential tothe $1,337area.
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