The price of gold: the Dollar did not help the recovery
The progressive weakening of the U.S. dollar, it would seem, was to promote the continued growth of gold prices. However, a three-day rising channel on Monday was not continued – Troy ounce of the precious metal is worth $1219 and slightly reduced. All in anticipation of a new wave of rally, where interest risk is minimal and the need for the tools “safe Harbor” is small.
While financial market participants are in no hurry to stock up on safe assets such as gold, for example, even amid budget problems in Italy and threats to the integrity of the EU. On the market be more stable the rumors that followed by Britain, the European Union may leave and Italy, where the authorities are firmly on your goals on budget and do not see anything criminal in the growth of its deficit-to-GDP ratio.
The latest statistics from the CFTC, the U.S. Commission on commodity futures trading, shows that November 13, the net short positions in futures and other derivatives gold rose by 70.8 thousand contracts, the total volume of the shorts amounted to 153,9 thousand contracts. This five-week peak. The total long position on gold is estimated at 83.1 thousand contracts. The balance of power is quite clear: while in the global understanding of the stock markets have a motive for growth, as the U.S. dollar, interest in gold will be modest.
At the same time, the global picture over the decade shows that gold is becoming more and more an industrial metal and not a stock asset. 2017 last year was a year of growth in the use of gold in industry, its application in manufacturing increased by 3% and in whole amounted to more than 8% of total demand. According to “Alpari gold” at the end of 2018 this figure could grow to 5.5% in the industrial sector, amounting to about 10.5% of the total demand. Increasingly, gold is used in the production of electronics is very interesting, considering that in 2010 the volume of such applications has declined. Now he’s recovering, because the dissemination of technology requires the perfect chips in the same mobile phones.
Corridor short-term movement in gold is in the range $1215-$1222 per Troy ounce, but if the greenback drops further, it appears the chances of recovery to $1235.