Just maybe there is some fresh money coming in

Gold prices continued to oscillate between gains and losses on Tuesday despite weakness in the U.S. dollar and a broad-based rally in equities and commodities.  The spot price of gold rose to $1,634.28 in overnight trading, but later slid back toward unchanged at $1,626.74 per ounce.  Since reaching a six-week high of $1,642.35 on June 6, the gold price has remained in consolidation mode as investors await the outcome of this week’s Federal Reserve meeting.

Simon Weeks, a director of precious metals sales at ScotiaMocatta, wrote in a note to clients this morning that “Gold has hardly been leading from the front as it’s been seen as a source of cash rather than a currency in its own right – but there are some signs that with ETF inventories on the rise again…that maybe, just maybe there is some fresh money coming in.”

The gold price did receive a bit of support from another disappointing U.S. economic report this morning.  The Commerce Department released Housing Starts data for May, which showed a 4.8% decline to an annual rate of 708,000 – below the 720,000 consensus estimate among economists.

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