Gold faces upside hurdle yet floor looks well supported
NEW YORK (Scrap Register): Gold is facing technical hurdles on the upside as the range-bound market remains caught between political and economic drivers, said Standard Chartered.
Gold prices tested intra-year highs Wednesday on a flight to safety driven by the escalating uncertainty about U.S. sanctions on Russia and U.S.-China trade tensions, Standard added.
Tactical positioning was relatively light, suggesting scope for additional net length; however, U.S. inflation data and March FOMC [Federal Open Market Committee] minutes stalled gold’s rally.
The hawkish minutes knocked the wind out of gold’s sails, and we expect prices to test the downside as we approach the June FOMC. Standard Chartered describes the physical market as somewhat mixed although with buying from India.
However, gold’s floor looks well supported amid the geopolitical uncertainty, especially as exchange-traded-product buying has turned positive. The upside still appears to be a difficult hurdle to breach.