Precious Metals Mixed, is Gold “Bottoming Out”?
Gold and silver futures closed near unchanged at the COMEX on Tuesday as precious metals held steady in the face of a firmer U.S. dollar. COMEX gold for July delivery settled down by $1.80, or 0.1%, at $1,662.40 per ounce while July silver futures finished up $0.02 at $30.89 per ounce and the U.S. Dollar Index rose 0.1% to 78.826 this afternoon.
Although the price of gold has moved modestly higher in recent weeks, it remains near the low end of the trading range it has occupied over the past several months. As a result, there continues to be a wide variety of opinions among the analyst community on the outlook for the yellow metal, including several that appeared in a report by CNBC earlier today.
Nikos Kavalis, an analyst at Royal Bank stated recently that “What I would definitely say is, near term, I can’t see the price breaking higher, to $1,700 an ounce or above. It needs another catalyst, something more powerful than perhaps in the near future there could potentially be QE. Of course, an excessively loose monetary policy environment will continue but whether there is a need for another QE, I am not convinced. We are in an environment where market-specific fundamentals are taking a bit of a backseat and general sentiment is really the driving force.”
HSBC analyst James Steel offered a more constructive stance in a note to clients: “The bullion markets have been on the defensive since U.S. Federal Reserve Chairman Ben Bernanke began distancing the Fed from a third round of quantitative easing in testimony to Congress on 29 February…Prices appear to be stabilizing above $1,620 an ounce, however, and we believe that net long positions on the COMEX in gold and silver have fallen to levels at which latent bulls may begin to rebuild positions. This leads us to believe that prices may bottom out, at least in the near term.”
Source: Gold Alert