GOLD: Narrowing Gap To All-Time Highs Despite Moderate USD Strength
Dec-12 14:00
- Gold secures strong gains this session, narrowing the gap to the $4381.5/oz all-time highs and bull trigger seen on October 20. The "less hawkish" FOMC this week will have underpinned upward momentum over the past sessions through the interest rate expectations channel but headline drivers on today's leg have been scant. One supportive factor may be fresh positions from improved dollar liquidity following Fed reserve management purchase announcements.
- ETF flows into gold interestingly seem to have bottomed out after some weakness amid the late-Oct pullback. Further pick-up here would act supportive of spot ahead.
- SNB governing board member Tschudin said in yesterday's press conference the SNB's investments in gold remained "constant" over the last years, amounting to around 10% of their total balance sheet as of now. They view that as "quite much". looking at their "complete investment strategy repeatedly and are happy with the current setup."
- From a technical perspective, recent price action reinforces a bullish theme. The bear phase between Oct 20 and 28 appears to have been a correction and note that the recovery since Oct 28 signals the end of that corrective cycle. On the topside, $4404.9/oz would be the next target, 3.500 proj of the May 15 - Jun 16 - 30 price swing.
- In Silver, meanwhile, trend conditions also remain bullish and this week’s push to fresh cycle highs reinforce current conditions. ETF flows have acted supportive here in recent trade, with spot through the psychological $60.00 handle paving the way for an extension towards the $62.937 handle next. Initial key support lies at $56.398, the 20-day EMA.
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