Gold Prices: Market Gives Back Some Gains As Dollar Index Holds Above 90
(Kitco News)- The goldmarket saw some technical selling pressures ending Tuesday’s session down onthe day, pushed lower by improved investor risk sentiment and a stronger U.S. dollar.
June goldfutures settled the session at $1,337.30 an ounce, down 0.71% on the day.
At the sametime, May silver futures last traded at $16.392 an ounce, down 1.7% on the day.
Accordingto analysts, the precious metals market felt downward pressure on Tuesday after bargain hunters jumped back into equitymarkets following Monday’s nearly 3% across-the-board drop in North Americanindices. Modest gains in the U.S. dollar index was also weighing on the yellowmetal. The U.S. dollar last traded at 90 points, up 0.14% on the day against abasket of global currencies.
The goldmarket is tread water, analysts noted, caught in a near-term trading channelahead of Friday’s nonfarm payrolls report. DailyFX.com warned that it sees fewprofitable opportunities in the gold market, even if prices have room to moveslightly higher.
“At themoment there is little edge given that price is in the middle of the range from1302 up to 1366. It is best to operate around the perimeters, that is to lookfor fading opportunities at support and resistance,” DailyFX.com’s analystssaid.
While goldprices are below initial support levels, Bill Baruch, president of Blue LineFutures said that despite Tuesday’s selling pressure, he is still encouraged bythe market’s resiliency.
“If thetape can continue to be constructive there is, without doubt, enoughfundamental firepower to create a breakout this week,” he said.
Analysts atScotiabank pointed out that they remain bullish on gold as long as prices holdsupport above $1,331.60 an ounce.
However,not all see the potential for the yellow metal. Analysts at BNP Paribas saidthat by their standards, gold is slightly overpriced with a positioning scoreof 6.1 out of 10. The firm sees a lot more potential for silver, whichaccording to its calculations has a positioning score of 1.1 out of 10.
Despite themodest selling pressure, the gold market is seeing a strong start to the secondquarter. Earlier in the day, the CME Group said that daily average tradingactivity in gold futures hit a record in the first quarter of 382,000 contracts,an increase of 43% compared to the first quarter of 2017.
Meanwhile,daily average trading volume for silver was up 34% to 109,000 contracts in thefirst quarter of 2018.
During thefirst quarter, gold prices rose nearly 2%. However, silver has underperformed,dropping almost 4% in the first three months of the year.
By Neils ChristensenFor Kitco News
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