The Year of the Dog Begins and Gold Gains 3% On the Week
The Chinese New Year, also known as the Spring Festival begins today initiating the year of the dog. Trading was quiet in Asia as markets closed in observance of this holiday.
Substantial weekly gains characterized gold pricing as the U.S. dollar index lost ground throughout the trading week. Gold futures (April 2018 contract) had significant gains trading from the lows on Monday at $1,317 per ounce, to its current pricing at $1,351.20. Gaining approximately $34 in trading this week, the vast majority of those gains were the result of a sizable upside spike on Wednesday which added over $20 in value, with a range of $39.
This week gold prices saw steady price increases beginning on Monday with spot gold gaining roughly $8.00, the result of a combination of four parts buying (+$4.35), and three-parts dollar weakness (+3.55). On Tuesday gold prices continue to move higher resulting in a six-dollar price gain which was almost 100% due to dollar weakness.
Although dollar weakness certainly provided substantial tailwinds taking gold prices higher, gains from Tuesday's strong uptick was the direct result of traders bidding up the precious yellow metal. Spot gold gained roughly $24.60, with $15.80 directly attributed to normal trading and the remaining $8.80 as a result of a weakening US dollar.
Thursday provided modest gains adding roughly $3.80 in value. However, yesterday's action was all about dollar weakness which contributed $6.60, as buyers sold into the gains of Wednesday resulting in a $-2.80.
Gold gained value for the first four days of the week and today, softening slightly closing at $138.40, giving up approximately $4.90 in value. On closer inspection today's lower pricing was all about dollar strength with gains of $3.60 attributed to normal trading and $8.50 contracted is direct result of solid US dollar performance.
According to MarketWatch "Spot gold has risen 3.2% so far this week, putting it on track for its biggest weekly rise since April 2016."
The financial markets will be close on Monday in observance of Presidents' Day. Today marks the beginning of the Chinese New Year for 2018, the year of the dog. These two events could certainly mute any action which could limit trading volume and price action over the long three day weekend.
For those who would like more information, simply use this link.
Wishing you as always, good trading,
By Gary WagnerContributing tokitco.com
Follow @garyswagner
gary@thegoldforecast.comwww.thegoldforecast.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.