Gold News: Government Shutdown Fails To See Gold Past Price Ceiling
Gold News
In the latest gold news: As of January 22 at approximately 1:46pm EST, gold was trading at $1332.43 per ounce, dipping slightly after last weeks’ strong performance. At approximately this time last week, gold was trading at $1340.73 per ounce.
Last week gold tested the significant level of $1340 and although there were thoughts that gold could possibly shoot past the ceiling of resistance, we find ourselves in the face of a slight dip in price of the bullion. Ole Hansen, head of commodity strategy at Saxo Bank, recently stated, “There is underlying demand in the gold market that is visible but the speed at which speculative long positions have built up over the past weeks could be a bit of concern for investor”. Bill Baruch, president of Blue Line Futures, echoed this sentiment, warning traders that the long position is starting to look “crowded” and thus, as gold prices test significant resistance he is neutral on gold in the near term. His firm, however, maintains a bullish outlook on gold in the long-term as do many others in the market. This is the fifth consecutive week that hedge funds have purchased gold, however, despite this bullish sentiment overall, there are warning signs that momentum is fading as bearish positions start to build.
On a different note, gold has also been receiving support from two other recent events. Firstly, the government shutdown in America recently has furthered the support for gold based on the weakness of the American dollar. Secondly, investors have been pouring in to the gold market from the cryptocurrency one, following the massive losses in Bitcoin and the extremely volatile fluctuations. While this has built support for the bullion, there is still room for price growth and investors are waiting to see what might push the metal up or down. Andrew Hecht, creator of the Hecht Commodity Report, believes that this push might come from another metal: silver. “Gold may be waiting for one last signal from it’s little brother before it takes off to the upside”. Hecht believes that it is possible that silver’s lackluster performance, compared to gold could be a reason that gold is struggling to break the ceiling of resistance. We will have to wait and see where the bullion goes next.
This sentiment has caused the bullion to remain pushing up against upper price bounds, at least for now. In the 14-day gold prediction ending January 02, I Know First’s algorithm based on a stock prediction algorithm showed an impressive 100% accuracy rate, as seen in “Gold Forecast Based on Algorithmic Trading: Returns up to 4.53% in 14 Days.” After a fortnight, I Know First’s average percent change came out to 4.53% with GLD as the top earner, bringing in an impressive 4.53% return to investors.
