Gold Regains Its Legs
(Kitco News)- Gold finds its legs after the crush in global equity marketsyesterday. The rising yields with the uncertainty of the trade war with Chinabecame too much for equity investors and the herd headed for the exits. Thescenario suggests that it was a safe haven play, but generally when equitiescollapse the first move for gold is lower, as investors raise cash to meetmargin calls. This move in gold is more consistent with the view that themarkets are warning the Fed about its aggressive policy and a change insentiment here will adversely affect the dollar. The weakness in the dollarovernight and to some extent the fear in the equity carnage spooked the shorts.We would expect gold to hover around this level as the equity chaos plays outtoday. From a technical perspective, watch the $1,197 level for support and the$1,207 level for a breakout to the $1,222 next target.
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