IGI Securities Limited – Commodity News

Karachi, June 11, 2018 (PPI-OT): Gold

Technical

Gold markets rallied slightly during the week, testing the $1300 level. If it can break above the $1305 region, the market could go higher, perhaps reaching towards the $1320 level. Above there, the market opens towards the $1350 level. Otherwise, if it break down below the uptrend line, it could drift down to the $1275 level, perhaps even lower, and down to the $1240 level. Gold markets are very sensitive to risk appetite around the world, and that of course could come into play at any moment. With the Americans and the North Koreans getting ready to talk, the reaction could be quite volatile and violent. The $1360 level above is massive resistance, and if it can break above there, the market could snap to the upside, not the least of which would be the target of $1400. If it can break above that level, the market could continue to go much higher.

Highlights

Gold firmed on Friday as a rise in risk aversion ahead of G7 talks this weekend lent support

Yellow metal remained hemmed within its narrowest weekly range in over a decade as a recovery by the dollar capped gains

Expectations that the Federal Reserve will announce another U.S interest rate hike next week also pressured gold

The dollar edged off a three-week low rising against the euro

Higher rates lift the opportunity cost of investing in non-yielding assets, such as bullion

Fundamentals

Gold prices edged higher today as the dollar softened ahead of key central bank policy meetings and the U.S and North Korea summit this week, and as a weekend G7 summit fanned trade war fears.

Spot gold was up 0.1 percent at $1,299.30 per ounce. U.S gold futures for August delivery were 0.1 percent higher at $1,303.40 per ounce. Dollar kept falling against a basket of major rivals to near two-week lows.

The dollar index, which measures the greenback against a basket of six major currencies, was down 0.1 percent at 93.495. The market opened predictably quiet ahead of the abundance of risk events this week and wholly ignored President Trump going rogue at the G7.

Geopolitical risk moderating, it will be the FED and ECB that will guide gold’s near-term fate. U.S President Donald Trump threw the G7’s efforts to show a united front into disarray after taking aim at Canadian Prime Minister Justin Trudeau.

The U.S Federal Reserve’s Federal Open Market Committee (FOMC) starts its two-day meeting, where it is anticipated to raise U.S interest rates. The European Central Bank (ECB) and Bank of Japan’s policy meetings are also due this week.

The FOMC coming up and the Trump meeting with Kim Jong Un, so the markets are just watching what’s going on. If there’s a better risk aversion money will fly into gold.

The dollar took a dip after Trump left early at the Group of Seven (G7) Summit held in Canada over the weekend. He later tweeted that he was backing out of the joint communique and lashed out against Canadian Prime Minister Justin Trudeau.

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IGI Securities Limited – Commodity News

Karachi, June 11, 2018 (PPI-OT): Gold

Technical

Gold markets rallied slightly during the week, testing the $1300 level. If it can break above the $1305 region, the market could go higher, perhaps reaching towards the $1320 level. Above there, the market opens towards the $1350 level. Otherwise, if it break down below the uptrend line, it could drift down to the $1275 level, perhaps even lower, and down to the $1240 level. Gold markets are very sensitive to risk appetite around the world, and that of course could come into play at any moment. With the Americans and the North Koreans getting ready to talk, the reaction could be quite volatile and violent. The $1360 level above is massive resistance, and if it can break above there, the market could snap to the upside, not the least of which would be the target of $1400. If it can break above that level, the market could continue to go much higher.

Highlights

Gold firmed on Friday as a rise in risk aversion ahead of G7 talks this weekend lent support

Yellow metal remained hemmed within its narrowest weekly range in over a decade as a recovery by the dollar capped gains

Expectations that the Federal Reserve will announce another U.S interest rate hike next week also pressured gold

The dollar edged off a three-week low rising against the euro

Higher rates lift the opportunity cost of investing in non-yielding assets, such as bullion

Fundamentals

Gold prices edged higher today as the dollar softened ahead of key central bank policy meetings and the U.S and North Korea summit this week, and as a weekend G7 summit fanned trade war fears.

Spot gold was up 0.1 percent at $1,299.30 per ounce. U.S gold futures for August delivery were 0.1 percent higher at $1,303.40 per ounce. Dollar kept falling against a basket of major rivals to near two-week lows.

The dollar index, which measures the greenback against a basket of six major currencies, was down 0.1 percent at 93.495. The market opened predictably quiet ahead of the abundance of risk events this week and wholly ignored President Trump going rogue at the G7.

Geopolitical risk moderating, it will be the FED and ECB that will guide gold’s near-term fate. U.S President Donald Trump threw the G7’s efforts to show a united front into disarray after taking aim at Canadian Prime Minister Justin Trudeau.

The U.S Federal Reserve’s Federal Open Market Committee (FOMC) starts its two-day meeting, where it is anticipated to raise U.S interest rates. The European Central Bank (ECB) and Bank of Japan’s policy meetings are also due this week.

The FOMC coming up and the Trump meeting with Kim Jong Un, so the markets are just watching what’s going on. If there’s a better risk aversion money will fly into gold.

The dollar took a dip after Trump left early at the Group of Seven (G7) Summit held in Canada over the weekend. He later tweeted that he was backing out of the joint communique and lashed out against Canadian Prime Minister Justin Trudeau.

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