RBC's Gero: Comex Gold Gets Short-Covering Bounce
George Gero, managing director with RBC WealthManagement, is describing the bounce in gold prices so far Tuesday as shortcovering. This is when traders with short, or bearish, positions buy to offsetthem. The covering came about after the short side of the market became“crowded” during a recent price pullback, Gero says. “All this means too manybears in the woods, and [a] dollar pullback quickly brings some shortcovering,” he adds. As of 9:18 a.m. EDT, Comex December gold was $3.10 higherto $1,220.70 an ounce, while the September dollar index was down 0.307 point to94.88. Gero cautions, however, that short-covering rallies tend to not lastlong, as is the case with event-driven rallies and sell-offs. “Steady up moveswith open interest up is a better signal for traders,” he adds.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: Gold To Test $1,200; ETF Outflows Continue
Tuesday August 7, 2018 08:06
Gold likely will test the $1,200-an-ounce level, and outflowscontinue from global exchange-traded funds, says Commerzbank. Spot metal hasbounced so far Tuesday, trading up $6.50 to $1,213.70 an ounce around 7:40 a.m.EDT. “A somewhat weaker U.S. dollar this morning is preventing gold fromshedding more of the gains it achieved late last week and from nearing the$1,200-per-troy-ounce mark again,” Commerzbank says. “It is not far off thisthreshold, however. We still think it is likely that this psychologicallyimportant mark will be tested. After all, the headwind faced by the gold priceis not really abating as yet.” Analysts cite Bloomberg data showing that goldETFs posted an outflow of more than seven tones Monday. “Holdings have thusalready been reduced by almost 16 tonnes since the beginning of the month,”Commerzbank adds.
By Allen Sykoraof Kitco News; asykora@kitco.com
FXTM: ‘Medium- To Longer-TermOutlook For Gold Remains Bearish’
Tuesday August 7, 2018 08:06
The outlook for gold remains bearish,says Lukman Otunuga,research analyst at FXTM. The metal has drawn support early Tuesday as the U.S.dollar eases. “While theprecious metal could struggle higher in the near term if the dollar continuesto weaken, the medium- to longer-term outlook for gold remains bearish,”Otunuga says. “It is becoming quite clear that the dollar is starting tooutshine gold as a safe-haven asset while expectations of higher U.S interestrates have translated to further pain for the zero-yielding metal.” The analystalso says gold looks bearish on the technical charts, with consistently lowerlows and highs. “Sustained weakness below $1,213 could invite a decline towards$1,200,” Otunuga says. “Alternatively, a solid breakout and daily close above$1,213 may trigger a rebound towards the $1,224 lower high.” Spot gold was $6.50 higher to $1,213.70 an ounce around 7:40a.m. EDT.
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