Gold Prices Holding Key Support Despite Growing Risk On Sentiment
The gold market is hovering near important technical support levels as prices trade at their lowest levels in two weeks. August gold last traded at $1,324.80 an ounce, down 1.4% on the day.
However, analysts remain optimistic on the yellow metal as prices remain above near-term support at $1,320 an ounce and longer-term support above $1,300.
In a recent interview with Kitco News, Ole Hansen, head of commodity strategy at Saxo Bank said that gold could fall to $1,308 an ounce and still remain in a technical uptrend. He added that he wouldn’t be worried about the correction unless prices fall below $1,275 an ounce.
“I think we could be in a new trading range between $1,275 and $1,375,” he said.
George Gero managing director with RBC Wealth Management, said in a report Thursday that he is not surprised gold is on the defensive following the Bank of England leaving interest rates unchanged and ahead of potentially more hawkish comments from regional Federal Reserve presidents. At the same time, he added that he expects gold prices to hold support at $1,220 in the near-term.
Phillip Streible, senior market analyst at RJO Futures said that investors shouldn’t rule out further short-term weakness in gold; but added that he sees the long-term bull market remains in place as long as prices remain above $1,252.80 an ounce
In a report Thursday, he said, “It is clear that this week’s slippage thus far is grossly insufficient to be approached as anything but another corrective hiccup within the broader bull.”
Joshua Mahony, market analyst at IG said that he is expecting to see weaker gold prices in the near-term.
“Given that we have seen a break below yesterday’s $1337 swing low and the $1335 support level, there is reason to believe we will see further losses,” he said. “Ultimately, a bearish short-term view is in play unless we see an hourly candle back above $1347.”
Analysts at iiTrader said that they are watching support areas between $1,318.90 an ounce to $1,315.20 an ounce.
“The bears will have a slight edge in the very near term as long as they can achieve a close below $1331-1$336 an ounce,” they wrote.
According to Kitco.com’s technical analyst Jim Wyckoff, investors should be watching for sell stops at $1,320 an ounce and then at $1,308 an ounce to $1.300 an ounce.