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Gold Bottoming Out, Expect Knee-Jerk Reaction If Fed Moves On Rates – Hug

As gold prices retrace Monday’s rebound, Kitco’s Peter Hug says he sees commodities, and gold, getting closer to a bottom. However, there is still more room on the downside, the global trading director told Kitco News Tuesday. “I think Friday’s price action was traders taking advantage of a thin market,” he notes, adding that since then the market bounced back up to the $1,065 area. “I suspect that support level will hold coming into data released later on this week,” he adds. Looking ahead to the potential December rate hikes, Hug says he thinks it is already priced into the gold market. “I think there’s still a real possibility of a knee-jerk reaction if the Fed moves [but] again I still don’t think they will,” he says, adding that once they do and it’s out of the way, he’d be a gold buyer. Hug also commented on recent sales data released from the U.S. Mint, which showed that gold and silver coin sales soared as prices hit multi-year lows in November. Although this should be price supportive for the metals, Hug notes that exchange-traded fund redemptions are ‘balancing out’ any benefits from physical offtake. “So, you’re getting institutional selling into the ETF space and, at the same time, you’re getting physical offtake from the retail investors. It seems to be balancing out, at least from a North American perspective,” he says. Kitco News, December 1, 2015.

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Posted by: Dosed1979

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