Gold price holds $ 2,000 when investors buy the dip

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(Kitco News) – Gold investors are not ready to give up on $ 2,000 gold and people who go in to buy dips are a sign that prices want to go up, according to some market analysts.

After pushing to a one-week high, gold prices plunged briefly below $ 2000 on Tuesday morning, but investors were quick to jump in to buy at lower levels.

“This is just a sign of how strong demand is in the market, “said Philip Streible, chief market strategist at Blue Line Futures. “There are just too many people waiting on the sidelines to wait to get long. Investors are trying to protect themselves against the rising rise of inflation. ”

Gold help‘The demand outlook is a weaker US dollar, which has found no traction as the US dollar index trades at a low two years. The index traded last at 92.32 points, 0.5% down on the day.

Daniel Pavilonis, broker for senior commodities with RJO Futures, said that despite some selling pressure around the initial resistance levels, gold‘s momentum trading is still alive and well.
He added that along with a weaker US dollar, the gold market is finding support from falling federal yields. Yields on US 10-year bonds are currently trading at 66 basis points, down almost 3% on the day.

Pavilonis admitted he did not‘I do not expect to see a significant recovery in the US dollar as bond yields.

“We are here in unusual territory. you can‘ignore all economic damage that has been done, ‘he said. “This environment will create a lot more demand for the metals. ”

Look at gold‘s price action, Pavilonis said it’s only a matter of time before gold hits a fresh high heel.

Pavilonis is not the only analyst looking for higher prices in the full term. In a note published Tuesday, analysts at UBS said they see the potential for prices to drop to $ 2,300 an ounce.

“As the Fed continues to depress nominal rates and inflation expectations stand, we maintain our year-end forecast of $ 2,000 / oz,” analysts said. “In the short term, gold could move as high as $ 2,300 / oz, especially if geopolitical tensions go up.”

It was a relatively quiet day for economic news. The precious metals did not see much response to data of better than expected construction of housing.

Housing starts rose 22.6% – the largest gain since October 2016 – to a seasonally adjusted annual rate of 1,496 million units last month, the Department of Commerce said on Tuesday. The data significantly lowered expectations with consensus forecasts asking for a rate of 1.24 million units.

According to most economists, Wednesday will provide the most economic risk for markets, as the Federal Reserve will release the minutes from its monetary policy meeting in July.

“The market will seek guidance on its next steps in terms of offering accommodation,” Ole Hansen, head of commodity strategy at Saxo Bank, said in a note Tuesday.