Gold Slightly Higher On Stock Weakness
The stock market opened sharply lower on Monday morning but did recoup much of its losses throughout the day. Gold prices were bid slightly higher but gave back some of those gains to close near the unchanged mark. Of interest to investors is the recent volatility seen in the stock market. While it may be premature to call a top in equities, there do seem to be some signs of a market that may be turning the corner. Of course, this may also prove to be nothing more than a dip that is bought by investors. Precious metals investors did not appear to be too concerned today with the action in stocks. It is possible, however, that gold may see renewed buying interest if and/or when stocks show further signs of weakening.
The rally in the U.S. dollar index continues to limit buying interest in gold and precious metals. The dollar has remained strong as the Euro zone continues to struggle with lack of growth and deflationary pressures. In fact, the rally in the greenback could potentially have a significant amount of room to run to the upside and may continue to hamper the gold bulls.
There has been little new in the way of headlines recently with the exception of U.S. airstrikes in Syria. Investors have been able to seemingly brush off geopolitical risks thus far. Even gold has not seen any benefit from any type of flight to quality buying interest. This could obviously turn on a dime, however, and may provide gold and precious metals with some degree of support. In the meantime, gold will likely be driven by stocks, the dollar index and a poor technical posture.
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30 Sep 2014 | Categories: Gold