Gold price struggles as it aims for 6th-straight advance
New York (Feb 9) Gold futures switched between small gains and losses, trying for a sixth-straight advance on Thursday and clinging to their highest level in about 13 weeks as renewed dollar strength limited the precious metal’s run.
April gold GCJ7, +0.10% trading near break-even levels, stood near its Wednesday settlement at $1,239.50 an ounce—the highest finish since Nov. 10, according to FactSet data.
With the fundamental picture little-changed and a gold rally showing some signs of short-term fatigue, analysts are focusing on technical levels.
“We focus on $1251 as a major resistance area, as it is the 50% retracement level from summer 2016 highs to the recent low at $1124,” said Jason Rotman, principal at Lido Isle Advisors, in a note. “We think the low $1250s are going to provide formidable resistance to gold prices.”
Year to date, gold has gained more than 7%, while the dollar index has lost around 1.8% so far this year. The ICE U.S. Dollar Index DXY, +0.11% a measure of the dollar against a basket of six currencies, was up 0.1% at 100.30 early Thursday.
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The dollar largely firmed, against its Japanese counterpart in particular, as nervousness before Japanese Prime Minister Shinzo Abe’s Friday meeting with U.S. President Donald Trump in Washington kept a lid on the yen’s strength.
Many investors are closely watching the U.S.-Japan summit, especially after Trump unnerved Tokyo officials by accusing Japan of unfairly influencing the yen to help its exporters beat U.S. companies.
There was little on the economic horizon Thursday likely to sway the metals market from expectations for gradually higher Federal Reserve interest rates this year. Weekly jobless claims will be released at 8:30 a.m. Eastern Time, followed by wholesale inventories at 10 a.m. Eastern.
But Fedspeak could hold clues. Investors might look for direction from St. Louis Fed President James Bullard who will speak on U.S. economy and monetary policy at the St. Louis Financial Forum at 9:05 a.m. Eastern. Chicago Fed President Charles Evans will give a speech to the CFA Society of Chicago at 12:30 p.m. Eastern.
March silver SIH7, +0.28% tried to hold its fourth day of gains out of the last five, last up 3 cents, or 0.1%, to $17.73 an ounce.
“Silver is not narrowing the gap to gold, but is merely keeping pace—as can be seen from the gold/silver ratio, which has been hovering closely around the 70 level since mid-January,” said Commerzbank commodities analyst Carsten Fritsch and team, in a note.
The physical gold-backed SPDR Gold Trust GLD, +0.62% was down 0.3%, the iShares Silver Trust SLV, +0.30% was up 0.1%, and the VanEck Vectors Gold ETF GDX, +1.11% fell 0.4%.
Source: MarketWatch
