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A Second Chance For Gold In March

Mar. 05, 2018 2:05 PM ETIAU, SLV1 Comment
Clif Droke profile picture
Clif Droke


  • A renewal of economic concerns has given gold a chance to reverse.
  • Latest U.S. trade policy and rate concerns has increased the safety bid.
  • Just two things are needed to seal the deal for a March gold rally.

Just when it looked like gold's support was gone, back comes the safety bid as the fear factor returned last week. Renewed concerns over domestic trade policy and its possible impact on the U.S. economy put gold back into the spotlight last Friday. In today's comments I'll make the case for an upside resolution to gold's lateral trend at some point in March. We'll also examine some factors which would boost the odds of a gold turnaround this month in our latest discussion of the near-term outlook.

Gold prices rose on Friday in response to the heightened threat of a global trade war. President Donald Trump's decision late last week to place tariffs on imports of aluminum and steel caused alarm on Wall Street, sparking interest in safe havens including gold and the Japanese yen. After hitting the $1,302 level on Thursday, its lowest level since Jan. 2, spot gold rose 0.5 percent at $1,322 while April gold futures settled $18.20, or 1.4 percent, higher to end last week at $1,323.

Let's examine the growing list of factors which could boost gold's performance in the coming weeks. With all the increased worries confronting financial market participants right now, gold has all the psychological support it needs to establish a bottom and shake off its recent lethargy. Foremost among the many worries right now is the impact higher interest rates might have on the stock market. Already we've seen the damage inflicted on equities a month ago when rate-related jitters caused panic selling on Wall Street. While there was some initial spillover weakness in the gold market related to this panic, the metal's price bounced back in the immediate aftermath of the stock market's plunge as the all-important "fear factor" carried the day.

Another potential worry facing investors is the latest

This article was written by

Clif Droke profile picture
Clif Droke is an equity research analyst and writer for Cabot Wealth Network. He has covered equities and commodities, specializing in gold, since 1997 and is the editor of the Cabot SX Gold & Metals Advisor.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (1)

silverfortune profile picture
Insightful, thank you
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