Gold is expected to rise next week, but not everyone sees it changing the recent trend. Daniel Pavilonis, senior commodities brokers with RJO Futures, said looking toward next week gold might have the chance to add a little more to its gains, but sees the market topping out around $1,630-$1,640. Much of the strength in gold comes from hopes of another round of monetary stimulus, which is something he doesn’t foresee happening. At most, he said, the Fed may try to shift around the balance sheet in an effort to keep down longer-term yields. That would not be supportive for gold.
Pavilonis also said prior to the rebound off the $1,520s area, gold had been drifting lower, while U.S. bond yields were falling and German bund yields rising. He’s not convinced gold is a safe-haven asset yet. What also concerns him is the general economic slowdown globally, which hurts demand for everything, including gold. Crude oil prices are falling, which is another side of economic weakness.
“In the near-term I see gold up a little more from here, but then I see it coming back down. If we break this week’s low, there’s nothing to stop it until $1,470 and then maybe $1,420,” he said.
To read the full article with Dan comments, please go to Kitco.com
Series 3 Licensed
Senior Commodities Broker
Daniel started his career as a broker with Lind-Waldock in 2007. He is well diversified in the markets with the indexes and currencies amongst his favorites. Daniel can often be found quoted in industry sources, such as Bloomberg, Dow Jones Newswires, WSJ and Futures magazine..... Read More
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