Gold Prices Near Session Lows As Wall Street Recovers
(Kitco News) - Gold prices hit session lows late Tuesday afternoon as U.S. stocks bounced back up in what analysts described as a very volatile trading environment.
The Dow Jones Industrial Average, which tumbled 1,600 points in the previous session, closed with a 567-points gain — the biggest intraday rise in almost a year. And S&P 500 Index rose 85.80 points, rising the most in a year, after a massive drop of 5% in the previous session.
April Comex gold futures declined throughout the day, last trading at $1,325.20, down 0.85% on the day.
This kind of volatility in the equity markets should be a concern for all investors, senior market strategist at RJO Futures Phillip Streible told Kitco News.
Streible highlighted that gold is not benefitting as much as it usually would in light of all this uncertainty.
“Under normal circumstances, gold would benefit more, but unfortunately, gold doesn’t earn interest and investors are opting to buy bonds as interest rates rise,” Streible said.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.2924175530478188)
Key level to watch right now is $1,320, he noted, adding that if prices fall below that, we could see $1,300 back in play.
Kitco’s senior technical analyst Jim Wyckoff described the equities’ recovery as a “dead-cat bounce” and projected further losses in the near term.
“The gains seen as of this writing Tuesday afternoon do not repair the major chart damage seen the past few days in the major U.S. stock indexes. That technical damage still suggests more downside pressure is coming,” Wyckoff wrote in his PM Roundup.
“Don’t be surprised if more selling pressure in the stock market occurs yet this week. And if that’s the case, safe-haven gold and silver markets will benefit. I would be very surprised if the steep downdraft we saw in stocks on Friday and Monday can just be swept under the rug by the bulls,” he added.
In the meantime, the U.S. dollar index edged up, last trading at 89.67, up 0.06% on the day.
Streible said he views the dollar index as somewhat oversold. “I am slightly favoring the upside at the moment — continuing into the 90 area.” But, a drop below 88.5 could trigger another selloff, he pointed out.
By Anna GolubovaFor Kitco News
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agolubova@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.