The Daily Market Report: Gold Pressures Resistance at $1200


25-Mar (USAGOLD) — Gold remains well bid, pressuring the $1200 level, amid rising concerns about the health of the U.S. economy. The deteriorating growth outlook and persistently weak inflation has swung the pendulum on Fed rate hike expectations further out.

This morning it was revealed that durable goods orders tumbled 1.4% in February. That was well below expectations of +0.3%. January’s solid transportation driven gains were also revised significantly lower from +2.8% to +2.0%. Ex-trans in February came in at -0.4% and the January ex-trans number was revised down from +0.3% to -0.7%.

Now bad news like this would typically be viewed as good news for stock investors, lending credence to the notion that the Fed won’t be raising rates any time soon. This time however, stocks are actually treating bad news as bad news, with the DJIA down more than 200 points.

We continue to see a pretty steady flow of clients moving funds out of shares and into gold. The recent volatility in stocks may be indicative of a top. At the same time the Dow was struggling above the 18,000 level, gold is attracting buying interest below $1200. If the yellow metal moves convincingly above that level, the market may find some buy stops that could lead to upside follow-through.

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