MKS: Gold Getting Oversold On Pullback; Support At 100-Day Average

Wednesday May 25, 2016 08:27

MKS (Switzerland) SA remains "cautious" on gold but also says the metal may be getting "oversold" on the technical charts after a recent pullback. Comex June gold has been as soft as $1,220.50 an ounce so far Wednesday, after having traded as high as $1,290.40 on May 16. "Looking at the technicals, the metals do look a little oversold here, but considering that Comex gross longs in gold were still very close to all-time highs -- as (of) 17 May -- we are cautious that there may be additional downside," says Alex Thorndike, senior precious-metals trader. Next support sits at the 100-day moving average, he says. For the June futures, this comes in at $1,212.90 an ounce. Meanwhile, Thorndike adds that Chinese investors have been buying as they "happily" take advantage of lower prices, with the premium trading around $2 to $3 over the loco London gold price for onshore traders.

By Allen Sykora of Kitco News; asykora@kitco.com