RBC's Gero: Gold Pressured By Dollar; 'Contrarians' Await 'Trigger'
Gold priceshave hit their lowest level in a year on a strong U.S. dollar, with thosewanting to buy on price weakness waiting for some kind of “trigger,” says George Gero, managing director with RBC WealthManagement. As of 8:47 a.m. EDT, Comex August gold was $2.50 lower to $1,224.80an ounce. “Gold prices continue [to be] pressured by FedChair [Jerome] Powell remarks of better economy with no inflation worries andcontinued rate hikes, giving [the U.S.] dollar a boost,” Gero says. Thepotential for more rate hikes is adding to dollar strength at a time when theworld is worried about a trade war and geopolitical issues, all of whichnormally would help gold’s status as a safe haven, Gero says. At some point,the price weakness may attract “contrarians” as buyers, but any rally “needs atrigger and a cowbell to lead this,” Gero concludes.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: Gold May Test $1,200 ButAttract Bargain Hunters
Wednesday July 18, 2018 09:00
Commerzbank analysts say they look forgold to test the $1,200-an-ounce level, although they also look for bargainhunting to emerge at lower prices. The most recent leg lower is the result ofupbeat comments on the U.S. economy Tuesday from Fed Chair Jerome Powell,Commerzbank says. Otherwise, analysts have expressed surprise at gold’smulti-week slide due to concerns about a trade war hurting the economy andongoing geopolitical risks. “One possible argument for the weak price could be that goldis being sold to offset losses in other commodity sectors,” Commerzbank says.The analysts conclude: “Webelieve that gold will test the $1,200 mark. Possibly this level will attractbargain hunters, who will halt the price slide.” As of 8:46 a.m. EDT, spotgold was $2.60 lower to $1,224.75 an ounce.
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: U.S. Dollar Retains Bid After PowellComments
Wednesday July 18, 2018 09:00
The U.S. dollar is strong after Tuesdaycomments from Federal Reserve Chair Jerome Powell were seen as a sign thatmonetary tightening will continue at the same pace as markets had expected despiteworries about a trade war, says Brown Brothers Harriman. This has ramificationfor precious metals since they often move inversely to the U.S. currency. As of8:43 a.m. EDT, the September U.S. dollar index was up 0.286 point to 94.990. “After softening in Europe yesterday, the dollar recovered in the NorthAmerican session with the help of assurances by Fed Chair Powell,” BBH says. “He reaffirmed the pathgradual path despite clear recognition that tariffs threaten wages and growth.The greenback has extended those gains today and is higher against all theemerging-market currencies, expected the Turkish lira, which is slightly firmer.”
By Allen SykoraFor Kitco News
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