As gold prices continue to make their way higher this week, the yellow metal could test its 'ultimate target for bulls', which is currently set at $1,357 - September's high, says MKS PAMP trader Sam Laughlin.
'We are likely to see further short squeezes over the near-term as the metal edges toward USD $1,350 and above this the September 2017 high around USD $1,357,' Laughlin writes.
Gold’s price moves continue to be guided by the U.S. dollar, specifically the USD/China “as both on-shore and off-shore yuan strengthen considerably against the greenback,” he points out.
The trading is likely to remain quiet in Monday as it is Dr. Martin Luther King Jr. Day in the U.S., Laughlin adds.
January’s Trend: Weak U.S. Dollar Boosting Gold Prices - BMO
Gold prices touched the highest level since early September during the European trading session on Monday, with gold mainly supported by a falling U.S. dollar, according to BMO Capital Markets analyst Colin Hamilton.
“This continues the trend of January being a strong month for precious metals, and suggests that underlying investment demand remains robust,” says Hamilton.
A key trigger to keep an eye on this week is the risk of the potential U.S. government shutdown if “a budget deal [is] not be agreed by Friday,” adds Hamilton.
Spot gold was last at $1,341.50, up 0.30% on the day after hitting the highest level since September 8 at $1,344.44.
Source: Kitco News