Spot gold added 0.45 percent to $1,253.55 an ounce. On Thursday, it touched $1,245.32, its lowest since Dec. 13, 2017. U.S. gold futures for August delivery settled up $3.50 at $1,254.50.
· "We're receiving only a couple of dollars bounce on the back of a pretty decent weakening of the dollar, so gold's not showing any signs of strength," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. "The shorts are still in control and the momentum is negative. The dollar and U.S. treasuries have taken over the role of safe haven this month and as long as the trade war is creating uncertainty then that will probably prevail."
· Gold was on track for a third straight weekly decline, having slipped 1.4 percent so far this week. Spot gold was down about 3.6 percent for the month, heading for its biggest monthly drop since November 2016.
"There is feeling in some quarters that we may be nearing the bottom of this recent downturn (in gold)," MKS PAMP Group trader Tim Brown wrote in a note.
Support-wise, gold appears fairly well bid around $1,245-$1,248 and there should be support at $1,237 and below that, Brown said.
Hansen said the downtrend would likely accelerate unless gold held above multiple layers of support slightly below $1,240. "If that area breaks, the shorts and momentum sellers will have a field day."
· TD Securities says gold may suffer more in the near term, but the Canadian bank looks for the precious metal to eventually recover as the U.S. dollar loses momentum and investors look for a hedge amid geopolitical and trade issues.
In fact, the late-Thursday report from TDS strategists Bart Melek, Ryan McKay and Daniel Ghali forecast that gold will average $1,375 an ounce in the final three months of 2019. The report was titled: “Too early to write obituary for gold.”
Gold weakened this month. The strategists said “it is quite possible that we have not seen the bottom yet” since traders have been ignoring easing U.S. Treasury yields, signs of weaker economic data and a loss of risk appetite. Instead, gold has been responding to a stronger U.S. dollar and technical-chart considerations.
“If price action following the previous ‘death cross’ [on the technical charts] back in late November 2016 is to be a guide, the $1,230s or even lower are real possibilities,” TDS said.
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