Gold Price Awaits “Trigger” to Push it Higher

GOLD PRICE NEWS – The gold price continued to consolidate near $1,620 per ounce on Monday amid a relatively quiet start to the week in financial markets across the globe.  The price of gold rose to an overnight high of $1,628 as the U.S. dollar fell against a composite of foreign currencies, but later pared its gains alongside the commodities complex.  Thus far in August, the spot gold price has now risen 0.4%, and is up by 3.7% on a year-to-date basis.

Silver fared worse than the price of gold this morning, as it fell by $0.13, or 0.5%, to $28.02 per ounce.  Other precious metals headed south as well, with platinum futures dipping 0.3% to $1,395.60 per ounce and palladium retreating 1.1% to $576.10 per ounce.  Among cyclical commodities, crude oil futures dropped 0.6% to $92.32 per barrel while copper slid 1.3% to $3.35 per pound.

Gold shares opened in the black on Monday, with the Market Vectors Gold Miners ETF (GDX) reaching a five-week high of $45.34 per share.  However, the gold sector subsequently surrendered its gains as the broader equity markets turned lower.  Nonetheless, a few notable gold miners remaining in positive territory included Barrick Gold (ABX), Goldcorp (GG), and Kinross Gold (KGC).  ABX advanced by 0.6% to $34.78, GG by 0.6% to $37.72, and KGC by 0.9% to $8.31 per share.

Although the gold price advanced 1.1% last week, it has yet to surpass the high end of the $1,550 – $1,630 trading range that it has occupied since early May.  With the Federal Reserve and European Central Bank (ECB) both choosing to not announce new monetary stimulus measures earlier this month, the yellow metal has remained in consolidation mode.  The next central-bank related event that is likely to meaningfully impact the price of gold is the Fed’s annual Economic Symposium in Jackson Hole, Wyoming – which in 2010 marked the unofficial announcement of QE2 by Chairman Ben Bernanke.

Bayram Dincer, an analyst at LGT Capital Management, noted that within the gold market, “We are still in this range-bound trading area, with the upper limit being $1,630.  Technically speaking, (a break of) $1,633 is really the trigger that is needed to push” the gold price higher.”

Looking ahead to this week, the U.S. economic calendar contains several reports likely to serve as more modest catalysts for the gold price.  Retail Sales for July will be announced Tuesday morning, along with the Producer Price Index (PPI).  The Consumer Price Index (CPI), another key gauge of inflation, will be released on Wednesday.  Weekly jobless claims are scheduled for their usual time on Thursday, followed by the Philadelphia Fed Index later that morning.  The week then concludes on Friday with the University of Michigan Consumer Sentiment Index and a report on Leading Indicators for July.