Gold Prices Tap 19-Month Lows
$GLD, $DXY, $USDTRY
- Gold has lost its appeal as a safe-haven during the past few months
Commentary: Gold at 1175 reached important support, it will be important to see if the support 1175 holds near term or takes the price to much lower marks medium term. A bounce from 1175 is preferred now, barring that the current fall could continue to 1150 or lower next week. PE
Note: There is some consolidation in USD’s strength now. Emerging market currencies are also seeing some strengthening. There is also some anticipation regarding President Trump intervening to halt USD’s rise.
Gold prices tapped a 19-month low early Thursday, mainly due to the strong USD and concerns about the Turkey crisis.
Spot Gold fell by 1.2% to 1,159.96, its lowest since January 2017.
However, Bullion prices managed to recover slightly with spot gold going back up to 1,172.48 oz after the USD (.DXY) eased from a 14-month highs at 97, on news that China will hold trade talks with Washington this month.
Stop-loss selling early in the session pushed prices sharply lower, and it has recovered since on short-covering and physical buying.
Gold has lost its appeal as a safe-haven over the past few months as investors have preferred to park assets in US Treasuries and USD due to the uncertainty caused by the US-China trade dispute.
The situation in Turkey also continues to remain in focus, with the US confirming Wednesday that it will not remove steel tariffs, even if Turkey frees a US pastor the President Trump is determined to have freed from house arrest there.
The Turkish Lira recovered after Qatar pledged $15-B in investment to Turkey but has reversed and continues its fall.
- USD/TRY: +3.42% to 6.032 at the close in New York on Friday.
Looking ahead, spot Gold may fall further into an important at 1,142-1,154.
Have a terrific weekend