UNITED STATES March 05 2017 10:37 AM
NEW YORK (Scrap Register): Bears have taken control of the gold market in the short term, although political worries remain supportive for the longer term, said Lukman Otunuga, research analyst at FXTM.
“The growing speculation of the Federal Reserve raising U.S. interest rates in March has exposed gold to downside shocks, with the metal booking its biggest one-day loss of 2017 during Thursday’s trading session,” said the analyst.
“Sellers have exploited the repeated hawkish comments from Fed officials to pressure the yellow metal, while a strengthening dollar continues to cap upside gains,” Otunuga added.
Further dollar appreciation and improving sentiment toward the U.S. economy could leave gold vulnerable to further losses, Otunuga continues.
“Although the concerns over political risks in Europe, Brexit woes and (U.S. President Donald) Trump developments attract investors to safe-haven assets in the medium to longer term, bears currently remain in control on the daily charts,” he added.
“From a technical standpoint, further weakness below $1,220 could encourage a selloff lower towards $1,200,” Otunuga added.