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Gold price showing potential resilience following dip

Photo credit: Mark Herpel. Edited with TVScanline effect

Photo credit: Mark Herpel. Edited with TVScanline effect

The gold price rallied slightly yesterday after an ebb caused by a strong Dollar, suggestions of a Fed rate hike and a positive outlook on the US economy. However the price remains in flux rather than on an upward trajectory. Marketwatch quoted Michael Armbruster, principal and co-founder at Altavest as saying precious metals are momentarily disconnected from their usual correlations with outside markets: ‘It could be that gold’s strength is evidence of skepticism of the sustainability of the stock market’s melt-up. [But] we expect something to give sooner rather than later, either stocks and bonds will reverse course or the precious metals will falter. It will be interesting to see which occurs first.’

Kevin Caron, market strategist at Stifel Nicolaus spoke to The Street, saying ‘gold still has a role in portfolios but we’re a bit cautious of the metal being somewhat underweight.’ Caron went on to make a prediction of a ‘trend line higher than the gold price but at more modest pace than what we’ve seen in recent years.’ However, this morning gold kicked on again as the Dollar wavered. Reuters reported that ‘spot gold had edged up 0.1 percent to $1,233.16 per ounce at 0053 GMT, while U.S. gold futures were up 0.1 percent at $1,234.6’.

There were also signs of the gold price remaining robust longer term. Earlier in the week Dominic Schnider, UBS’s Asia-Pacific commodity head, told CNBC he expects only two rate hikes from the Fed this year. ‘There’s plenty of uncertainty out there – Inflation is going to accelerate faster than the Fed is going to hike rates; that’s good for real assets. On top of it, we are looking for weak dollar on broad basis; that combination has a good tendency to boost [gold] prices.’

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-price-showing-potential-resilience-following-dip-12977/

Posted by on Feb 16 2017. Filed under Gold News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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