Gold fell below $1,300 today for the first time since the Brexit vote in June, as the dollar index rose to a two-month high.
Gold fell below $1,300 today for the first time since the Brexit vote in June, as the dollar index rose to a two-month high. At press time, gold was down $42, at $1,270.
The dollar rose amid increasing speculation that the Federal Reserve will raise interest rates by December. Both Federal Reserve Bank of Cleveland President Loretta Mester and Federal Reserve Bank of Richmond President Jeffrey Lacker have come out in favor of higher interest rates. Manufacturing data released Monday was stronger than expected.
Also pushing down gold is the U.S. dollar’s rise against the British pound, which fell to a 31-year low against the dollar after the release of a timeline for Britain’s exit from the European Union. Aiding gold’s woes is a rise in Deutsche Bank shares today, signaling at least a temporary easing of worries over the bank’s liquidity, and lessening gold’s role as a safe haven.
Jason Hamlin of Gold Stock Bull says, “The next key technical support level for gold is $1,255, a level that was both support and resistance in the past. Furthermore, this price support coincides with the 200-day moving average, so it is likely to offer very strong support for the gold price.”
Hamlin sees several trends that should be supportive of precious metals, including an increase in the U.S. debt of $1.4 trillion at the end of the 2016 fiscal year, increasing geopolitical tensions with Russia, and Saudi Arabia’s threat to dump its U.S. debt holdings.
“With a number of new bullish factors for gold emerging in the past week, it is hard to imagine prices dropping much lower. But in leveraged paper markets with plenty of weak-handed short-term traders, anything is possible,” Hamlin added.
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1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17133