Gold Spot Update – Below $1424 Level Only Sell Big Down Side Expected

Gold Spot Update – Below $1424 Level Only Sell Big Down Side Expected

Safe havens shined brightly Tuesday “as global slowdown worries are growing,” said Edward Moya, senior market analyst at Oanda.”The initial trade truce risk-on rally is over, and markets have little to show in hopes of a trade deal getting finalized anytime soon.”

August gold GCQ19, +0.97% rose $18.70, or 1.4%, to settle at $1,408 an ounce. The precious metal saw prices drop $24.40, or 1.7%, on Monday, representing the steepest dollar and percentage decline for most-active futures contracts since June 2018, according to FactSet data.

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“There is a continuity to buying the big dips, selling the big rallies as we also continue to stay in the new higher trading range [of] $1,385-$1,450,” said George Gero, managing director at RBC Wealth Management, in a daily note. “Longer term, gold is still reacting to coming inflation. Most countries worry about a global slowdown, and lower rates continue in at least 22 countries. All this means most central banks are in favor of continued easing as well.”

The ICE Dollar Index DXY, -0.03% a gauge of the greenback against major currencies, was off 0.2% Tuesday at 96.681, making commodities priced in the metal more attractive to buyers using other currencies. The metal also rose as benchmark debt yields edged back down. The Reserve Bank of Australia cut its benchmark interest rates for the second time in less than 30 days to combat signs of sluggish economic growth in the region, emanating from China.