RBC’s Gero: Dollar, Rate Expectations Push Comex Gold Lower
New York (Sept 13) Comex gold is on the defensive in a market expecting higher U.S. interest rates down the road, while the European Central Bank recently undertook more monetary accommodation, says George Gero, precious-metals strategist with RBC Capital Markets Global Futures. “That is giving us a strong dollar, and a strong dollar is a headwind for the metals,” Gero says. While off its lows, the euro earlier this week fell as far as $1.28959 after being above $1.31 as recently as Sept. 4. December gold has slipped as far as $1,232.80 so far Friday, its weakest level since January. As of 9:55 a.m. EDT, the contract was down $4.10 to $1,234.90 an ounce. Gero says traders are “needing more guidance from the Fed if the market is too far ahead” of rate expectations. The Federal Open Market Committee is scheduled to meet Tuesday and Wednesday. Gero adds that he sees potential for short covering after the recent pullback.