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Gold Futures Back up, but Boxed in Without Much Upside

Commodities Feb 12, 2020 02:56PM ET
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By Barani Krishnan

Investing.com - Gold eked out a gain Wednesday to end up for the fifth time in six sessions. But the market’s upside is being increasingly challenged by a lack of big buy factors.

Gold futures for April delivery on New York’s COMEX settled up $1.50, or 0.1%, at $1,571.60 per ounce.

Spot gold, which tracks live trades in bullion, was, however, down $1.30, or 0.1%, at $1,566.12 by 2:38 PM ET (19:48 GMT).

“Between all the significant incidents from potential war with Iraq and presidential impeachment hearings, to the out-break of the coronavirus, this market has been inflated and deflated by headlines and still not managed to pick a clear direction for the short-to-medium term,” said Eric Scoles, commodities strategist at RJO Futures in Chicago.

“There is a heavy net long position by gold traders which has limited the upward price reaction and creating a risk of washout for longs but there are also too many potential catalysts for many to be willing to risk a short position in gold.”

Scare over the coronavirus, now known as Covid-19, initially sent gold near January’s seven-year highs above $1,600 an ounce. But in recent weeks, the yellow metal’s status as a preferred hedge to the virus has dulled somewhat.

China said on Wednesday that the number of new coronavirus cases confirmed inside the country had declined for two days in a row. As of Wednesday, China had 1,114 deaths from the disease. The only other fatality has been in the Philippines.

While the declining infection rate in China could indicate that draconian control measures implemented by the country are helping, the chief scientist for the World Health Organization has warned it's still possible that many cases are lurking around the world undetected, so more localized outbreaks could emerge. If that happens, what is still considered a Chinese epidemic could grow into a global pandemic.

“Investors may be bargain hunting in gold soon if we see lower prices,” said George Gero, precious metals analyst at RBC Wealth Management in New York.

Gold Futures Back up, but Boxed in Without Much Upside
 

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Comments (4)
Mart Bab
Rubberduck1973 Feb 12, 2020 4:24PM ET
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Further more “Between all the significant incidents from potential war with Iraq and presidential impeachment hearings, to the out-break of the coronavirus”. First. Impeachment hearings don’t have any affect on gold price. Secund. There is no peace with Iran yet. Third, the US China trade war is not on your list. Neither is brexit. Nor a weakening global economy.This trade war with China has not bean solved by the fase 1 trade deal that has so little in it, that no one even pays attention to it. Tarrifs are still in place. China bought nothing more from the us up till now. So trade deficits are still there. Why am I the one explaining all of this. Market is up because we are in the q4 earning season. Come q1 earnings and there will be a shock.
Heine Pedersen
Heine Pedersen Feb 12, 2020 3:19PM ET
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You know.. ****Bloomberg is a more credible news sources than Investing.com, these days. Amazing level of manipulation going on.
Heine Pedersen
Heine Pedersen Feb 12, 2020 3:16PM ET
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What about Silver and Platinum?
Mart Bab
Rubberduck1973 Feb 12, 2020 3:14PM ET
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China said on Wednesday that the number of new coronavirus cases confirmed inside the country had declined for two days in a row.   They just changed the way they count infected.
Robert Flores
Robert Flores Feb 12, 2020 3:14PM ET
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Probably
Mart Bab
Rubberduck1973 Feb 12, 2020 3:14PM ET
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Robert Flores  https://www.cnbc.com/2020/02/12/coronavirus-live-updates-covid-19.html. Artikel 10:09 am. You can even see the document
 
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