Gold Firmer In Late Trading After Scoring 3.5-Mo. High Early Wednesday
LONDON (Aug 28) Gold prices are modestly higher in afternoon trading Wednesday, recovering from a mild profit-taking and corrective pullback seen in late-morning trading. More safe-haven investor demand and technically related buying pushed gold prices to a 3.5-month high in overnight trading. December Comex gold was last up $2.00 at $1,422.20 an ounce. Spot gold was last quoted up $6.50 at $1423.00. September Comex silver last traded down $0.251 at $24.40 an ounce.
Gold prices are now up around 20% from the June low, which was a nearly three-year low. A long-time general gauge of a market entering bullish territory is when its price moves up by 20% from its last major low.
As the U.S. appears poised to take military action against Syria after its government regime used chemical weapons against its citizens, the market place is extra nervous. Such has recently favored safe-haven assets such as gold and U.S. Treasuries. Crude oil prices have also risen sharply recently, on worries about disruptions to oil exports from the Middle East.
There are worries U.S. military intervention in Syria could escalate into further instability and violence in the already volatile Middle East. Specifically, the market place wonders what the Syrian regime will do after it’s been hit with U.S. missiles. Will it attack Israel? Will it use more chemical weapons? Will Iran get involved? There is an old saying that the first thing that goes out the window during a major military operation is the original plan.
The key “outside markets” were in a neutral daily posture for the precious metals markets Wednesday. The U.S. dollar index was higher on more short covering and some safe-haven demand, which was bearish for the precious metals. The greenback still bears have the overall near-term chart advantage. Meantime, Nymex crude oil futures prices were higher early Tuesday and hit a more-than two-year high. The crude oil bulls have the solid overall near-term technical advantage.
The London P.M. gold fix is $1,419.50 versus the previous P.M. fixing of $1,419.25.
