· Gold prices on Monday hit their highest since September, buoyed by a weaker U.S. dollar, which slumped to three-year lows against a basket of currencies.
Spot gold was up 0.2 percent at $1,340.72 an ounce by 0302 GMT, after touching its strongest since Sept. 8 at$1,342.06
· Spot gold rose for a fifth straight week last week, gaining 1.4 percent.
· U.S. gold futures were up 0.4 percent at $1,340.80 an ounce.
· “While the weaker dollar remained gold’s primary driver, investors are keeping an eye on the simmering geopolitical hot spot in the Middle East,” said Stephen Innes, APAC head of trading at OANDA.
· “Iran remains among the most poignant of geopolitical risks this year following President Trump’s decision not to ratify Iran’s compliance on the nuclear deal ... Gold investors are likely under-positioned for a significant escalation which could lead to considerable price increase.”
· Iran’s president said on Sunday the United States had failed to undermine a nuclear deal between Tehran and major powers, and hailed the accord as a “long-lasting victory” for Iran, state television reported.
· U.S. President Donald Trump on Friday delivered an ultimatum to European signatories of the deal to fix the “terrible flaws” of the agreement with Iran, or the United States would pull out.
· The dollar index on Monday dropped 0.2 percent to 90.773, its lowest since Jan. 2015.
· The recent drop in U.S. unemployment could spark a surge in inflation that, given the Federal Reserve’s current policy framework, could trigger interest-rate hikes that bring on a recession, Boston Federal Reserve President Eric Rosengren warned on Friday.
· Adding a touch of bullishness to gold was the data from U.S. Commodity Futures Trading Commission (CFTC) on Friday, which showed that hedge funds and money managers raised their net long positions in COMEX gold and silver contracts in the week to Jan. 9. [CFTC/]
· Spot gold may break a resistance at $1,341 per ounce and rise to the Sept. 8, 2017 high of $1,357.54, as suggested by a retracement analysis, according to Reuters technical analyst Wang Tao.
· Among other precious metals, palladium was down 0.4 percent at $1,119.59 on Monday, after hitting record highs at $1,126.30 an ounce on Friday.
· Spot silver rose 0.1 percent to $17.26 an ounce.
· Platinum was mostly unchanged at $993.15, after hitting its highest since Sept. 11 at $998.50 on Friday.
· Traders and analysts who take part in the weekly Kitco News gold survey look for the recent weakness in the U.S. dollar to continue underpinning gold in the next week.
· Seventeen market professionals took part in the Wall Street survey. Twelve, or 71%, called for gold to rise. There were four votes, or 24%, saying gold would fall, while one participant, or 6%, called for a sideways market.
· Meanwhile, 663 votes were cast in an online Main Street poll. A total of 404 voters, or 61%, looked for gold to climb in the next week. Another 182, or 27%, said lower, while 77, or 12%, were neutral.
· For the year 2017, Main Street ended up being right 31 of 50 times for a winning percentage of 62%.Wall Streetforecasters collectively were right 30 of 51 times for 59%. (There were two weeks without a Main Street poll and one week without a Wall Street poll).
· “We’re heading toward $1,350,” said Daniel Pavilonis, senior commodities broker with RJO Futures. “There’s weakness in the dollar and the [equity and oil] markets are looking a little toppy.”
· George Gero, managing director with RBC Wealth Management, also said higher, commenting that there is “enough on every worriers’ plate to keep a bid” in gold.
“I am bullish for next week,” said Kevin Grady, president of Phoenix Futures and Options LLC. “We are seeing big inflows into commodities in general. I think that most of these new longs are passive longs, which tend to stay in the markets longer.”
· Sean Lusk, director of commercial hedging with Walsh Trading, also looks for more gains, particularly if gold can gain momentum above the $1,330 resistance level.
“I believe this push still has legs to the upside,” he said. “Nobody wants to be short this thing. The dollar is getting whacked.”
However, others look for the dollar to stabilize, which could prompt a pullback in gold.
Reference: Kitco,Reuters
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