The price of gold under pressure this morning due to a stronger dollar. The dollar index hitting 97.32 this morning, the highest level since March. A continued rally in the equity markets also pressuring the price of gold.
Recent strong job numbers and June housing data (reported up 4.8 percent) gives the Fed a strong case for raising rates at the next Fed meeting.
Scheduled European Central Bank meeting tomorrow and the expectation is that they will leave their policy unchanged.
Some Wall Street Gold traders this morning indicated that they expect gold to test the $ 1,300 dollar level. One trader also shared, in his opinion, that in the event the Fed comes in and raises rates at the next Fed meeting, the bull market will cease to exist and the $1,300 dollar level will become a distant memory.
I can’t disagree. A rate hike is the last thing people holding a long position in gold want to see. Nonetheless, we still see inflows in the ETFs. Overnight, all four metals increased their positions. This is becoming a very interesting market. If the economic data continues to be upbeat, the longs will have a tough time holding on to their positions and I expect a strong
move to the downside in the price of gold will be in order.
Have a wonderful Wednesday.
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