Gold Prices Lose Luster: Is the Recent Run-Up In Prices Over?

New York (Feb 16)  Gold prices are mixed early this week, with February Globex gold futures down 8.5 points in Monday trading, to 1,225.9, while March and April gold futures were down 8.9 and 9.0, respectively (to 1,226.2 and 1,227.0.)

In early Tuesday trading, gold bounced back to 1,227 per ounce, as prices rose ahead of Federal Reserve Chair Janet Yellen's testimony in front of Congress, where she held the  line on "gradual" interest rate hikes going forward. During midday trading on Wednesday, March and April contracts were up 6.3% and 7.7%, respectively.

Volatility is a trend that bears watching, say gold experts, as gold prices are up 10% since mid-December, 2016 lows, but they are starting to veer downward in mid-February.

"Now that everyone is catching on, I think gold could soon meet overhead resistance," states John Ross Crooks, a commodities, currencies and options trader, in a research post on Uncommon Wisdom Daily this week. "In fact, I'll be looking to sell gold  -- or wait for a new buying opportunity --  if the current rally hits a range between $1,277 and $1,288."

There are a few key indicators gold investors should measure before making any big moves on either side of any trade, gold specialists.

"Investors should be watching closely for action in the dollar and ten-year treasury yields, as they both seem to move the price of gold every step of the way," notes Walter Pehowich, vice president of investor services at Dillon Gage Metals.

"As of today, the price of gold is under pressure as the dollar index approaches the 101 level again and ten-year bonds yields advance," adds Pehowich. "Currently, the price of gold is trading below the most recent support level at $1,228 and approaching a double-bottom in the charts at $1,222."

Source: TheStreet