Gold with the next target being $1,803 in the short term

The gold price ­traded near unchanged Friday, hovering near $1,780 per ounce.  The spot price of gold climbed to $1,789.10 – the highest level since November 11, 2011 – during yesterday’s session, but pared its gains as short-term traders took profits in the yellow metal.  With its slight advance, the gold price extended its weekly and year-to-date gains to 3.4% and 13.8%, respectively.

Commenting on the consolidation in the gold price, Saxo Bank’s Ole Hansen wrote in a note to clients that “(We had) technical buying yesterday with a lack of follow-through today despite support from weaker dollar.”  Hansen added that “I wouldn’t be surprised to find that the market wants to check the conviction of those recent initiated longs here.”

In contrast to Saxo Bank, analysts at TD Securities remained more positive on the short-term outlook for the price of gold.  “After yesterday’s nice move higher in gold, taking out buy stops at $1763 resistance, we have been flirting with $1780. London saw $1781 briefly on its open but we’ve since moved slightly lower. The EUR is higher, base metals are mixed, and oil is holding recent gains. Overall we remain positive to gold with the next target being $1,803 in the short term.”

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