Gold Fundamental Analysis
Analysis and Recommendations
Gold spent
the day directionless meandering between small gains and losses, taking a
breather from a hard week. Prices are modestly lower in early U.S.
trading Friday, on some profit-taking pressure from this week’s strong
price gains. The key markets are also in a bearish posture for the
precious metals early Friday, as the U.S. dollar index is higher and
crude oil prices are weaker. Still, it’s been a good week for the gold
and silver market bulls. December gold last traded down $5.60 at
$1,667.20 an ounce. Spot gold was last quoted down $6.20 an ounce at
$1,665.50. September Comex silver last traded down $0.141 at $30.315 an
ounce. The US dollar strengthened after a positive Durable Goods print,
which surprised markets.
In overnight news, European stocks were slightly lower as European
traders were awaiting the results of a meeting between German Chancellor
Angela Merkel and Greek Prime Minister Samaras, regarding Greece’s
financial woes. The tensions between Iran and the U.S./Israel are
building, which could be adding to the heightened risk aversion in the
market place this week. Safe-haven buying interest has resurfaced in the
gold market, and even in the silver market, this week. Many traders are
already looking ahead to next week’s U.S. Federal Reserve symposium in
Jackson Hole, Wyoming, and the September 6 monthly meeting of the
European Central Bank.
After showcasing an impressive rally the previous day, precious
metals and base metals eased earlier today as optimism over monetary
stimulus by the Fed waned. However, commodities were seen paring the
losses by afternoon as the markets await the outcome of the meeting
between German Chancellor and Greek Prime Minister. The yellow metal
softened from its four-and-a-half month high, yet, it was heading to
post the biggest weekly gain in more than two months. Meanwhile, spot
silver was probably on its course to register its largest weekly rise
since last October.
In LME, prices declined earlier as worries that Spain could need
sovereign aid and on fading hopes of monetary stimulus from the US
Federal Reserve.
