Gold corrected modestly in overseas trading, but is now back in positive territory, pressuring yesterday’s high. Amid ongoing dollar weakness and political uncertainty, the bias for the yellow metal is to the upside.
Housing starts in June rebounded more than expected, which seems like the first bit of good economic news we’ve seen in a awhile. However, the trend is pretty flat and home builder confidence has tumbled recently.
The dollar remains defensive in the wake of recent weakness in inflation data, which has caused the deterioration of September rate hike expectations. In an article today, Jim Richards contends that the Fed has already raised the white flag and is unlikely to hike rates again before December.
As that realities sinks in, the dollar will likely slip further, adding further buoyancy to the yellow metal. The 1248/1250 technical resistance zone is the next hurdle to clear.