Gold loses grip on $1300 again
The gold bulls appear to be really having a difficult time. Despite all
of the potential bullish geopolitical factors being seen right now, the
gold market has thus far not been able to get any type of sustainable
rally going to the upside. In fact, the gold bulls have not been able to
put any meaningful distance between the market and the $1300 level for
some time. With the gold market once again dropping below this
psychologically important level today, one has to wonder if there may be
more downside in store for the yellow metal.
Stocks seem intent on continuing their seemingly irrational ascent
higher, and unless something changes the gold bulls may continue to
throw in the towel. Perhaps it will take weakness in the equities
markets for gold to get anything significant going to the upside.Given
gold's lack of bullish interest, one has to wonder if even that will be
enough to drive the metal higher.
This week could potentially see market moving commentary from the FOMC. Minutes from the latest FOMC meeting will be released Wednesday afternoon, followed by the Kansas City's annual Fed meeting in Jackson Hole, Wyoming. Investors will likely be paying close attention to any remarks by the Fed or Chairwoman Janet Yellen regrading the potential for rate hikes. Given the ongoing improvement in economic data, the issue of the potential for a rate hike has become much more highly debated in recent weeks.
Risk appetite has remained relatively strong when one looks at the stock market, however, one also must consider the fact that U.S. and German yields continue to be on the low side of the ledger. This divergence could potentially be indicative of volatility to come which could potentially give gold and precious metals a boost.
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19 Aug 2014 | Categories: Gold
