Will dollar profit taking continue to help gold?
Bullion.Directory precious metals analysis 23 March, 2015
By Harley Salt
Co-founder, Director of Sales Trading at Bullion Index
Gold ended the week up over US$23/oz and erased all of the losses of 2015 so far.
The US dollar weakness and dollar profit taking is benefiting gold, in the short term I expect this will continue and be a significant driver for the price of gold.
The dollar index lost more than 2.5 percent last week.
This week traders will be looking to see if gold can consolidate further and hold the US$1,191/oz level , if it does, this would be confirmation gold has reversed its declining channel which began in 2013.
The most important piece of data out this week is the Consumer Price Index (CPI) out on Tuesday. It is expected that it will be positive for the first time in five months, but only marginally positive.
Low inflation rates are an issue for the Fed with it trying to lift inflation to the 2% range. A weak CPI reading will cause further UD dollar weakness and increase the demand for gold. Other data and events out this week include, Greek Prime Minister Alexis Tsipras is expected to provide a list of reforms to the Eurogroup this week, he will also meet German Chancellor Angela Merkel in Berlin.
On Wednesday we have US New Home Sales data and Durable Goods Orders out, Thursday US Jobless claims and US Q4 GDP data out Friday.
Silver also is on a good run at the moment, ending the week on a 4 week high. Traders will be looking for silver to continue to push higher and consolidate above US$17.00oz. Silver finished the week at US$16.73oz.
Gold closed at US$1,182.40oz in New York on Friday, up an impressive US$23.40oz on the week.
Bullion.Directory Price Comparison
Leave a Reply