Gold was hovering around $1,300 on Tuesday morning in London, finding support from continued dollar weakness.
On Monday gold breached the psychologically important $1,300 level for the first time since January 2015 while many markets in Asia and Europe were closed.
– The spot gold price was last at $1,297.4/1,297.7 per ounce, up $4.80 on the previous close. Trade has ranged from $1,289.40 to $1,302 so far.
– The dollar index is the lowest it has been since January 2015 – it was last at 92.11.
– “The dollar weakness is the main driver of the gold rally. How much higher gold can go may be in part dependent – in the short term at least – on how weak the dollar will trade. If the dollar continues to slide, gold is likely to gain,” HSBC analyst James Steel said.
– But the dollar is not the only potential driver for gold, Steel noted, citing an increase in technical and momentum-based players on gold’s bull side.
– “These same participants have been out of the market for some time and their entrance into gold may be a fresh source of buyers. That said, momentum and technical traders can also shift gears quickly if the USD rallies or gold’s upside stalls,” he said.
– Next resistance for gold is at its 2015 high of $1,307 while support should be found at the March 2016 high of $1,285,. MKS noted.
– Silver pushed above $18 in the previous session but has since retreated – it was last at $17.625/17.645 per ounce, down 10 cents. Platinum at $1,083/1,088 was up $11 and palladium at $620/625 was $3 higher.
(Editing by Mark Shaw)
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Source: Bullion Desk News
