Gold Ignores Dollar, Eyes Weekly Gain

June 10th, 2016 by

Gold prices are solidly higher yet again this morning, as this bull rally seems to be ignoring any inclination to correct to the downside. A higher dollar this morning is being completely ignored, as gold trends sharply higher in early New York trading. The yellow metal looks to set another solid weekly gain.

Spot gold looks to be putting in a morning top in the $1,276 range, up $65 an ounce from last Friday’s lows. Technical resistance lies at this $1,276 level, followed by $1,282. First support is seen at yesterday’s spot close of $1,269, then $1,256.

Gold_Vs_Dollars_Color

Thursday’s Markets

Defying expectations of a pullback after Wednesday’s gain of $19, Gold reached a cruising altitude of $1269 an ounce shortly after 11am Thursday, and held steady through the close. Spot gold ended the day exactly $7 higher, at $1,269.50. This follows a gain of $19.30 on Wednesday. August gold contracts ended with a gain of $10.40 to settle at $1,272.70. This comes after a gain of $15.30 on Wednesday.

Crude futures finished with a loss Thursday after hitting highs last seen in July 2015 on Wednesday. July WTI contracts ended down 1.3% to settle at $50.56 a barrel. August Brent futures lost 1.1% to end at $52.51.

Wall St. never saw positive territory on Thursday, pressured by the drop in oil prices and a global risk-off sentiment. Traders opted to pile into bonds instead, The German 10-year bund hit an all-time low of 0.037% (which has been broken today with a yield of 0.019%.)

Today’s Market

bear.“Perma-bear” George Soros is back to actively trading, much to the chagrin of equity fund managers. The billionaire investor has been dumping stocks, and loading up on gold and gold miners’ stocks.  As mentioned in the lede, gold is seeing another very good day. We’ve seen pretty much only $1.50 in pullbacks on a closing basis, since the unbelievably bad non-farm payrolls report last Friday.

Oil is having a bad day for the second day, even though global oil production is down by approximately 3.6 million barrels a day. A spate of profit taking after crude’s recent rally has depressed prices, and the stronger dollar is adding more pressure to the downside.

Looking Ahead

Next week will be even more volatile than this week, as wholesale and consumer inflation numbers are released, and the Federal Reserve hold its June policy meeting on Tuesday and Wednesday. The downbeat trend in global markets and the looming Brexit vote in the UK is seen as more than enough to stay the Fed’s hand when it comes to raising benchmark interest rates for the second time in six months.

Young Man Prefering Gold Bar to CashA recent study on the possible aftermath of a successful Brexit vote estimates that European stock markets could drop by 24%. Small wonder that famous gold company Sharps Pixley is unable to keep up with demand at its posh Mayfair showroom. A spokesman said that incoming bullion and coin shipments are regularly sold out before they even arrived at the store.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product