Dollar Caps Respectable Gains This Week In Gold

New York (Dec 22)  Even with gold prices lower today, my belief is that we will see prices advance towards the end of the year, which will be followed by very respectable gains in 2019. After surging more than $20 yesterday, gold futures basis the most active February contract is currently trading off by approximately $9.30 and fixed at $1,258.60.

One positive note is that even with today’s decline of over nine dollars, current pricing is still above the 200-day moving average. This could be indicating that gold is moving into a long-term bullish trend.

Price declines witnessed today in gold are wholly based upon dollar strength in both the futures and spot markets.

Based on the information available from the KGX (Kitco Gold Index), dollar strength actually added $7.80 to today’s decline. However, once we factor in moderate buying which amounted to a gain of $3.30, as of 5:00 PM Eastern standard time, spot gold is currently fixed at $,1254.90.

Today’s strong dollar is occurring even in light of an extremely high probability that the U.S. government will have a partial shutdown which will happen within hours if current negotiations cannot bear any fruit.

Dollar strength is a result of data suggesting not only economic strength but also economic growth. The consumer department revealed today that U.S. consumer spending grew at a faster pace than income in November. There was also the University of Michigan’s consumer sentiment gauge to consider, which showed a final December reading of 98.3, which beat market forecasts of 97.2.

KitcoNews