Gold Needs To Push Past $1,240 An Ounce To Signal A Trend Reversal - Analyst
(Kitco News)- Although optimism is starting to grow among gold traders,one technical analyst warns that it is still a little too early to turn overlybullish on the precious metal.
In a recent interview with Kitco News, Greg Harmon, founderof Dragonfly Capital, said while gold has bounced off recent support at $1,220an ounce, prices need to push past their October highs above $1,246 an ounce,before he becomes overtly positive on the yellow metal.
“We are starting to see higher lows, but we still need tomake higher highs,” he said. “A push above $1,240 an ounce would signal a trendreversal. We see some good momentum on this bounce, but we still need a littlebit more.”
Currently, gold prices have managed to push higher for fourconsecutive sessions. According to some analysts, the market is seeing renewedinterest as investors start to reprice interest rate hikes in 2019 as concernsover global economic growth continue to grow. The December gold futures lasttraded at $1,224.70 an ounce, up 0.14% on the day.
The CME Fedwatch Tool shows that although markets arepricing in two interest rates next year, expectations for four increases hasbeen pared back sharply from the previous week.
The risk-off sentiment among traders was acutely felt Mondayas traders once again fled equity markets, with the S&P 500 last trading at2686 points, down 1.8% on the day.
Although gold has some solid momentum, Harmon said that the preciousmetal still has a significant problem - it has been stuck in a $200 range forthe last five years.
“When you look at gold, it really hasn’t done anything since2013,” he said.
In the current environment, Harmon said that investorsshould look at playing the moment within the trade: “Buying when the pricebounces off the bottom and selling with it bounces off the top.”
Harmon added that if prices can push through the Octoberhigh, momentum traders could target the next major resistance level at $1,300 anounce.
By Neils ChristensenFor Kitco News
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nchristensen@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.  |