Monday, November 17, 2014

"Gold holds near 2-week high after short-covering rally"

And more troubling for those of an ursine bent, the price is bouncing above the triple-bottom price range of $1179-1183 from June and December 2013 and October 2014. A breakthrough to the upside would be cause for some concern re: the short thesis and our $875 target bottom.
$1188.70, up $3.10 last.
From Reuters:

* Gold scales 2-week high
    * Prices had gained over 2 pct on Friday
    * Holding $1,180 level key for further gains - trader

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Nov 17 (Reuters) - Gold held near two-week highs
on Monday, clinging on to gains from the previous session's
short-covering rally, on a softer dollar.
    Spot gold held steady at $1,187.20 an ounce by 0724
GMT, after earlier climbing to a two-week high of $1,193.95.
That followed a 2.3 percent jump on Friday that took the metal
above a key technical level of $1,180.
    The dollar swung wildly against the yen on Monday, initially
spiking to a seven-year high after data showed Japan's economy
unexpectedly slipped into recession before pulling back as the
grim economic news sent Tokyo stocks tumbling. The greenback
also eased against a basket of major currencies. 
    "A lot of new shorts were put into gold after we broke below
$1,180 and as we came back through it, there was some
short-covering," said a Hong Kong-based trader with a bullion
    "The $1,180 level is still the one that everyone is looking
at and if we hold that, we could go up to $1,230."
    However, the way higher may not be an easy one for bullion 
as the factors that brought down gold in the last few weeks to
its lowest in four-and-a-half-years have not gone away. 
    The dollar remains in favour with investors as U.S. data has
been pointing towards a recovery, and the yen and euro have been
weaker against the greenback.
    A stronger dollar and economic optimism could take the
appeal off gold, often seen as an alternative investment to
riskier assets. A robust economy could also prompt the U.S.
Federal Reserve to soon raise interest rates, hurting
non-interest-bearing gold.  
    Bearish sentiment among investors prevailed. Speculators in
gold futures and options slashed their long bets for a third
straight week, according to the Commodity Futures Trading
Hedge fund Paulson & Co maintained its stake in the world's
biggest gold-backed exchange-traded fund, SPDR Gold Trust,
in the third quarter, but legendary investor George Soros has
sharply cut his stake in Barrick Gold Corp and several gold
mining company ETFs.