Gold futures broke out above $1,200 late this week on the outlook of official US data indicating a possible interest-rate hike based on the strength of the economy. Then gold futures turned around for the day about $4 per ounce just under $1,198 per ounce at New York’s Commodity Exchange.
With the US dollar under pressure Wednesday after domestic industrial production showed to fall six-tenths of one percent (the largest drop since the summer of 2012, and twice as weak as economists had expected), the disappointing report rekindled speculation for the Federal Reserve Board to hold off hiking interest-rates anytime soon.
“Gold’s (futures) rebound can also be accredited with the uncertainty over Greece’s EU bailout negotiations…not to be overlooked,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his fundamental analysis regarding the current gold futures situation. Medina added, “The focus for gold traders is to see concrete economic reform or some other type of relief to alleviate the instability of her situation.”
Gold futures trend is technically up, however the market has been trading sideways for almost a month. Gold futures appear to be building a base for another breakout to the upside.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.