Why Gold Prices Are Weak Despite Greek Jitters
Today’s Spotlight Market
While Gold futures traders may be taking a ?ho hum? attitude towards Gold, physical buyers, Asian buyers in particular, are becoming more interested in buying Gold at current price levels. Government data out of India shows Gold imports up 11% in May with purchases totaling over 2.4 billion dollars. ?
Fundamentals
Gold?s role as a so called ?safe haven? investment is coming into question among some analysts citing its relatively poor performance in the wake of a possible default by Greece should negotiations with its creditors to receive much needed financial aid break down. The reluctance for traders to move some assets towards Gold seem to stem from a rising U.S. Dollar which makes commodities including Gold more expensive for non-dollar buyers, as well as the belief that the Federal Reserve will indeed begin to raise interest rates, potentially as early as September, which would also be viewed as negative for the precious metals sector. Ultimately, it may be Gold?s lack of price movement that is keeping market participants at bay, with the lead month futures trading in a relatively narrow $70 price range since mid-March. This lack of price volatility and directional trend could be leading traders to explore at other markets that they perceive to have better prospects than that of Gold at this time.
Technical Notes? -? View Today’s Chart
Looking at the daily continuation chart for Gold futures we notice a price consolidation pattern forming for most of this year as market volatility has contracted.? Prices are trading below both the 20 and 200-day moving averages, giving Gold bears the edge. The 14-day RSI remains in neutral territory with a current reading of 45.92. Support is seen at the June 5 low of 1164.00, with resistance found at 1232.00.
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