Gold prices were steady in Europe on Thursday but the market could ease after the long UK holiday weekend, analysts said. "Funds are holding but the market fears they will liquidate (and) is reluctant to buy," Peter Hillyard, analyst at ANZ Banking said.
He added the next $5 move for gold would be to the downside.
"There is no impetus to push this market (higher). The market will drift down a bit and next week we'll see a break," he said.
Spot gold stood at $438.40/439.20 an ounce at 1515 GMT, against New York's late Wednesday level of $437.20/437.90. The dollar was at $1.2296.
"Gold continues to range at the moment. There is resistance around $440.00, and that has stopped it a few times already this week," a European trader said.
Dollar softness on Wednesday, when gold peaked at the $440.50 top of a volatile $5.00 range, was sparked by softer-than-expected US durable good orders for July.
"In some respects the performance of gold yesterday must have disappointed the bulls in the market, as the dollar moved lower, and yet this proved insufficient to move the gold market through the $441.00 level," John Reade of UBS said.
"Interestingly, gold has also begun to underperform in other currencies - Yen, Swiss Francs and producer currencies, such as the Australian dollar - suggesting that the weight of the fund long position in the market is finally beginning to have an impact," he said.
Non-commercial net longs on COMEX stand at a record 157,607 lots, and the market is wary of a major sell-off if these longs are liquidated.
Gold shot to its highest in eight months at $449.30 a troy ounce nearly two weeks ago before a dollar bounce snuffed out an attempt on $450.00. Now, resistance has emerged well below that objective, others said.
In other metals, silver was low key after failing once more on Wednesday to clear stubborn MA resistance clustered above $7.00.
This suggests that the market is likely to favour the lower end of the current wide $6.80/7.20 band. Spot was at $6.91/6.94, against New York's $6.90/6.93.
Platinum was down at $894.00/898.00 versus $895.00/899.00, while palladium was indicated at $183.00/187.00, versus $183.00/185.00.
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