Gold Holds Steady as Equities and the Dollar Move Higher

Today is a mixed bag, with gold futures trading modestly lower and physical gold gaining slightly. Gold futures based on the most active June 2018 Comex contract closed down by $0.50 on the day and is currently fixed at $1,350.20. At the same time, physical or spot gold is trading up by approximately $1.60 at $1,347.28

U.S. equities continuing to make their dramatic ascent indicates a market sentiment that favors the risk-on asset class, as well as a modestly higher U.S. dollar, while gold remains resilient.

Although concerns still exist in regards to recent geopolitical events such as the military action in Syria, these concerns have become minimized. As such, traders are once again focusing upon global growth, U.S. equities and the continued trade dispute between the United States and China.

These polar opposite factors have created a scenario for gold pricing that is supportive of current pricing, and at the same time is limiting any major upside price moves.

In an interview with MarketWatch, Fawad Razaqzada, a technical analyst at Forex.com said, “Gold was held back Tuesday ‘first and foremost because of a dollar recovery, and secondly because of the equity market rally, which has reduced the appeal of safe-haven assets. However, with the Syrian and Russian situations lurking in the background, the dips remain shallow—for now, anyway.’”

Although Russia did not respond with any military action immediately following the joint military strike on Syria’s chemical weapons facilities, U.S. and U.K. officials have seen an uptick in cyber-attacks on both American, British companies and government agencies.

As reported in the New York Post, “The U.S. and the U.K. issued a vague but ominous joint statement Monday charging that Russia had in recent days ramped up its cyberattacks on American and British companies and government operations.”

The most ominous of actions revealed in this article states that “Russian state-sponsored actors are using compromised routers to conduct spoofing ‘man-in-the-middle’ attacks to support espionage, extract intellectual property, maintain persistent access to victim networks and potentially lay a foundation for future offensive operations,” according to a joint statement.”

Immediately following last week’s military strikes, multiple sources indicated a major uptick in cyber activity as relations between the United States and Russia deteriorate. Inasmuch as Russia promised retaliatory action if the United States took military action in Syria, that action might be taking place in cyberspace.

Wishing you as always, good trading,