Gold Up Amid Wobbly Stock Markets; Safe-Haven Demand Back
- Gold fell early on Thursday as investors cautiously watched volatile stock and oil markets for cues, but stayed above $1,200 an ounce, drawing some support from flows into bullion funds.
On Wednesday, gold had risen as much as 2 percent to $1,252.91 as lower oil prices dragged down stocks. But the metal gave up most of its gains to close up 0.2 percent higher as crude turned higher, lifting stocks, after data showed U.S. gasoline demand spiked.
Other safe-haven assets such as Treasuries also reversed course after the bounce in crude.
A gauge of equities across the globe closed lower on lingering concern about economic growth. Asian shares got off to a shaky start on Thursday in the face of a fragile recovery in volatile crude oil.
An increase in money flowing into bullion-backed exchange traded funds (ETF) has also supported the rally.
Inflows into SPDR Gold Trust, the top gold ETF, since the beginning of the year have already surpassed outflows for the whole of 2015. The increase in assets so far are also the highest since 2010.
On Wednesday, holdings of the fund rose again to 760.32 tonnes, its highest since March 2015.
- Gold prices dipped in early Asia Thursday on profit taking as investors exercise caution after sharp gains overnight.
- Gold prices ended the U.S. day session solidly higher Wednesday, on follow-through technical and safe-haven buying following Tuesday’s decent gains. The bulls are keeping a near-term price uptrend in place, which continues to invite chart-based buyers. April Comex gold was last up $13.40 at $1,235.80 an ounce. March Comex silver was last up $0.04 at $15.28 an ounce.
Technically, April gold futures prices closed near mid-range. Prices today saw a bullish upside “breakout” from a bullish symmetrical triangle pattern on the daily bar chart, to suggest more gains are coming. Prices are in a nine-week-old uptrend on the daily bar chart and bulls have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the February high of $1,263.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,200.00. First resistance is seen at $1,250.00 and then at today’s high of $1,254.30. First support is seen at today’s low of $1,222.40 and then at $1,210.00. Wyckoff’s Market Rating: 7.0
Reference: Reuters, Kitco
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