Bearish Drivers for Gold Subdued, To Retest Upper End of Range Near $1,300

Kitco News -- Gold prices ended the U.S. day session solidly lower Tuesday, but one market participant says some of the key bearish drivers appear to have ended and the metal may retest January highs. ‘In the bigger picture, the market has put in a pretty significant bottom – it is just a question of can it work from this foundation,’ said Mike McGlone director of research at ETF Securities. In an interview with Kitco News, McGlone said the bottom the metal saw in July appears ‘strong.’ ‘The July move to new post 2010 lows below $1,100 was a very extreme oversold condition in a thin July market,’ he explained. McGlone said he wouldn’t be surprised to see the metal head back to $1,300 an ounce. The main driver being that there could be a shift away from bearish factors for gold. ‘Fed tightening keeps getting put off. Much of the Fed tightening rhetoric has likely been focused on what they called ‘excessive risk taking’ -- at the beginning of 2015, the futures market was priced for 60bps of tightening in 2015, now they are priced for about 12bps,’ he said. McGlone also pointed to the U.S. dollar which he said appears to have topped at 100 in the USD index and is likely in a range. December Comex gold was last down $16.90 at $1,136.70 an ounce. September Comex silver was last down $0.157 at $14.60 an ounce.