By Kitco News
Wednesday May 25, 2016 14:15
(Kitco News) - In the grips of renewed selling pressure, on the back of a stronger U.S. dollar and growing interest rate expectations, the gold market is extending its losing streak to six consecutive sessions.
Although gold prices remain above key psychological support levels, some analysts are expecting to see further weakness as the market remains in a short-term downtrend. June Comex Gold futures settled the day down $5.40 at $1,223.80 an ounce.
Here is a roundup of some key support levels analysts are watching in the near-term.
Analysts at iiTrader, noted that with gold trading under a key pivot point at $1,228 an ounce, their major support area comes in between $1,205.5 and $1,208.6.
They added that a close above $1,231 is needed to weaken the current down trend and help stabilize the market.
Phillip Streible, senior market strategist at RJOFutures said that he is expecting the move below $1,228 an ounce to lead to a test of initial support at $1,215. He also expects that prices have a higher hurdle to cross before the bull camp back in control.
“A close over 1247.83 is needed to negate a bear trading stance,” he said.
Chris Beauchamp, senior analyst at IG Markets, said that he was watching the 100-day moving average at $1,213 an ounce as he expects to see lower prices in the near-term.
“Given the rapid break lower of recent days it is still likely that rallies will be sold. The next target below the 100-day SMA is $1180,” he said.
Ole Hansen, head of commodity strategy at Saxo Bank said that he is looking for gold to drop to $1,205 an ounce as price broke below the rising channel that was in place since February. He noted that gold prices could fall to $1,175 an ounce and still maintain its long-term uptrend.
“A return to $1,145/oz will signal a return to the drawing board for fresh guidance,” he said.” While US interest-rate expectations are being adjusted higher and the dollar continues to recover, gold will be struggling. However low growth, negative sovereign-bond yields, the potential of inflation making a rare return and upcoming event risks make us view the current setback as a healthy correction within the established uptrend.”
By Neils Christensen of Kitco News;