Gold Base Building For Possible Move Higher

  • Posted Tuesday, July 08, 2014 at 08:17 PM

TANGIBLE INVESTMENTS - Los Angeles - by James O'Dell - Gold and Silver prices retreated on Tuesday as Gold dipped to $1,319.90 an ounce, at the time of this writing, while Silver eased modestly to $21.01 an ounce as investors await the release of the minutes from the Fed's June policy meeting, due out on Wednesday. The price of Gold turned lower after Richmond Fed President Jeffrey Lacker, said during a speech at the Rotary Club of Charlotte that he sees inflation firming this year.

Equities are selling off in the U.S., as the Dow plunged triple digits after Raymond James & Associates announced earlier that stocks could be vulnerable to losses at the same time Citigroup Inc. voiced investor's rising concerns for a “severe” pullback. “There’s a little weakness the last couple of sessions in the stock market, and that has helped buoy it (Gold) off the lows,” said Walsh Trading's Sean Lusk.

The Gold bulls still have the upper hand, says Lusk. In fact, the market has moved above some major moving averages including the 20-day, 40-day, 100-day and 200-day moving averages in August Gold, which is a very bullish position. “We’re kind of building a base down here for possibly higher moves,” said Lusk.

“Technically, if we breach $1,335 to $1,350 on a closing basis, that will be a signal for momentum traders and more funds to step in,” says George Gero, of RBC Capital Markets Global Futures. Gero adds that it's the geopolitical concerns now surrounding nations like Iraq, Russia and Ukraine that continue to underpin the yellow metal, while low U.S. interest rates hamstring the dollar. “It seems like Gold could do a lot better if the technicals persist in the next week,” says Gero.

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