Gold Price Moves Back Above $1,180/oz - Gainesville Coins News
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Gold Price Moves Back Above $1,180/oz

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Gold Price Moves Back Above $1,180/oz

The precious metals were modestly higher in early morning trading on Monday, continuing to trend upward after hitting a fresh four-week high to end last week. The gold price advanced almost 0.7% to move back above $1,180 per ounce while spot silver was also about 0.7% higher, trading at $16.65/oz.

Both platinum and palladium also managed to nudge higher, putting all of the precious metals in the green despite the dollar being flat.

Changing Outlook

The downward bias in the gold market is not nearly as strong as we enter the second week of 2017. Although it is coming off of a rather disappointing November and December performance, gold is once again charting its path higher to begin the year.

pile-of-gold-rally

We could be seeing déjà vu in the gold trade relative to last year. In the first month of 2016, the stock market withstood heavy losses while traders and investors piled into the precious metals following a December rate hike. Might we see this pattern repeat itself to start 2017? The swing has not been nearly as dramatic as last January, but it's true nonetheless that this year has begun with higher gold prices as the Dow Jones proves unable to break the 20,000 barrier. The key index came within less than a point of this mark on Friday.

As gold and its precious metal cousins switch into a more bullish uptrend, the market is still shaking off the bearish forces. According to the Commodity Futures Trading Commission (CFTC), investment demand for gold has been consistently dropping: hedge funds as a group have been liquidating their long positions on gold for eight consecutive weeks. However, the technical outlook used by many traders has slowly but surely been improving for the yellow metal.

Outside Markets

gold bull (Photo: Anna Frodesiak)

Gold is looking for its first back-to-back days of gains since the presidential election. After weeks of risk-on trading behavior, safe haven assets are getting a boost on Monday. Treasurys also saw demand, with 10-year yields dropping to 2.37%. The approaching start of the Chinese New Year is also seen as a driving factor for greater gold demand.

A lot of attention is being paid to the crude oil market, as well. Oil prices have fallen from their recent rally, with West Texas Intermediate (WTI) crude hitting a wall at $54 per barrel. The expectation for greater drilling at offshore rigs in the U.S., with the rig count rising, could help offset any production cuts pursued by OPEC and its allies. There are lingering doubts that the organization will stick to its own reduced output targets, in any event.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

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