RBC's Gero: Gold Gets Safe-Haven Boost From Weaker Equities
“Gloomy” global equitieshave propelled gold to three-month highs as the precious metal acts like a safehaven again, says George Gero,managing director with RBC Wealth Management. Some traders are likely being forced tocover some short positions, he continues. “The fallout of Saudi problems, Italybudget headlines, trade wars and tariffs all weigh on stocks and [are] movinggold, which until recently was losing tonnage in ETFs [exchange-traded funds].Asset allocators now forced to look at gold as the usual additional alternativeto hedge volatility in stocks.”Comex December gold was last up $17.40 to $1,242 an ounce and peaked at $1,243,its most muscular level since July 26. The Dow Jones Industrial Average futureswere around 450 points lower ahead of the open on Wall Street.
By Allen Sykoraof Kitco News; asykora@kitco.com
MKS: Break Above$1,240/Oz Would Trigger Gold Short Covering
Tuesday October 23, 2018 09:28
A break above $1,240 anounce could prompt enough short covering to boost spot gold all the way to$1,250, says MKS (Switzerland) S.A. Short covering is when market participantsbuy to cover, or exit, short trades in which they took out a bearish position.Gold traded as high as $1,239 an ounce so far Tuesday. “Supportive price action remains evidentinitially around $1,220, while any extension toward $1,210-$1,215 is likely tosee resting bids restrict any further declines,” MKS says. “The recent build inshort positioning from mid this year sits heavily around $1,240 and any movestoward/through this level should instigate a spate of short covering topotentially push above the psychological $1,250 level.”
By Allen Sykoraof Kitco News; asykora@kitco.com
FXTM: Gold ‘Winning The Battle Of The Safe Havens’
Tuesday October 23, 2018 09:28
Gold is drawing more safe-haven strength than the U.S.dollar at the moment, says Lukman Otunuga, research analyst at FXTM. “Gold bulls hit the ground running this morning asgeopolitical concerns promoted risk aversion and accelerated the flight tosafety,” Otunuga says. “The yellow metal has scope to shine with intensity thisweek as the risk-off mood sends investors rushing to any form of safety.However, with the dollar also benefiting from safe-haven flows, there could befierce competition between the two. Gold seems to be winning the battle of thesafe havens this morning....” Normally, gold moves inversely to the greenback.Around 9:15 a.m. EDT, spot gold was $16.65 higher to $1,238.45 an ounce. “Asolid breakout and daily close above the $1,233.50 resistance level is likelyto inject gold bulls with enough inspiration to challenge $1,245,” Otunuga says.
By Allen SykoraFor Kitco News
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