NEW YORK (Scrap Register): Comex gold has bounced slightly from Thursday’s multi-week lows, helped by short covering, with $1,300 an ounce still doable, said George Gero, managing director with RBC Wealth Management.
Short covering is buying in which traders are exiting short, or bearish, trades. As of 9:02 a.m. EDT, Comex August gold was up $2.20 to $1,256.80 an ounce.
Gero blames selling this week on a move higher by the U.S. dollar after the Federal Reserve appeared more hawkish than expected, as well as selling by “disappointed” short-term traders and funds who had expected $1,300-an-ounce gold sooner rather than later. One focus next week is an options expiry.
He looks for “stalling prices in gold until after option expiration unless surprise headlines change prices again,” then “back to basics -- budgets and geopolitical and political worries, as $1,300 is still on the table.”