Gold price trading back around $1250 hit by a stronger US dollar
FRANKFURT (July 4) The price of an ounce of gold fell back around $1250 today and will remain volatile for some time as general market uncertainty, together with a stronger US dollar on currency markets is once again weighing on the precious metals value.
Latest Gold Price
Spot gold rose 0.3 percent to $1254.59 an ounce, after gaining almost 1 percent on Wednesday. In New York, gold futures for August delivery rose $8.50 or 0.7 percent to settle at $1251.90 an ounce on the NYMEX. Investors are on the sidelines today due to the US Independence Day holiday.
On the London market, the PM gold fixing was $1,246.00 against Tuesday’s previous PM fixing of $1,252.50 an ounce.
Bottom for Gold
Gold bullion traded below $1200 an ounce last week for the first time in four years following the indication from the US Federal Reserve that its stimulus program would at some point end, although stating the obvious, sent stock markets and gold prices falling.
“There will be those who believe that this is a buying opportunity. We disagree. We are similarly sceptical of gold mining shares, where we see significant bankruptcies and mothballing of capacity ahead.” according to Greg Bennett, a fund manager at Argonaut Capital.
Gold & the US Dollar
Gold prices ended Wednesday’s trading session flat after some early short covering and bargain hunting gave way to selling pressure brought on by the US Dollar Index pushing to a four week high, back near the 84 mark. Commodity prices tend to drop on a strong US dollar, however crude oil finished higher as traders mulled tensions in Egypt which could possibly affect crude oil supply.
After climbing to the doorsteps of 84 the figure, the Dollar Index commenced a correction lower to the closing levels around 83.40 and this morning at 07:04 GMT the ICE US Dollar Index was at 83.4750. The greenback bulls still have technical momentum on their side, which is a bearish underlying factor for the precious metals markets.
Gold Price Forecast
The gold bulls next upside near term price objective is to produce a close above technical resistance at $1300.00, whilst the gold bullion bears next near term downside breakout price objective is closing prices below solid technical support at last week’s low of $1179.40. First resistance is seen at this week’s high of $1267.00 and then at $1275.00. First support for gold is seen at Wednesday’s low of $1236.00 and then at this week’s low of $1224.10.
