Comex gold futures drifted further away from $430-an-ounce resistance to end lower on Wednesday, as a drop in oil prices and a rising dollar triggered selling in hard assets like the precious metals.
Silver, platinum and palladium prices also fell. Gold for December delivery at the New York Mercantile Exchange's Comex division lost $2.00 to settle at $425.60 an ounce, after trading from $430.10 to $424.20.
Estimated volume was 70,000 contracts. Recently strong safe havens like gold fell out of favour and the dollar and equities rose as oil prices skidded after a higher-than-expected build in crude stocks last week.
"There seemed to be a knock-on effect from the lower oil and euro on the precious metals," said a trader at a large bank, adding that momentum quickly shifted lower in metals due to the many outstanding positions currently in those markets.
"Open interest (in gold and silver) has really skyrocketed over the last week, and based off the other commodities, we saw some liquidation here," said another trader, a broker at a Comex metals firm.
Open interest in Comex gold rose 1,343 lots to 321,849 contracts as of October 26. Silver's open interest rose 1,318 to 116,815 contracts. The euro fell almost a full cent against the dollar as US crude oil fell nearly $3 to $52.35 in the afternoon.
Mixed US economic data and jitters surrounding the November 2 presidential contest have helped prop up gold as an alternative investment.
However, players were concerned that a massive speculative net long position in the metals could prompt a brutal sell-off as fund-type accounts pared back their holdings.
Brokers pegged key support in December gold at $423 an ounce and resistance at $433 and then at $436.50, the peak set by the active contract back in April. Spot gold tumbled to $423.55/4.30 from Tuesday's New York close at $426.05/6.80.
On Wednesday's afternoon London fix was at $428.25. December silver fell 13.8 cents to end at $7.202 an ounce, moving between $7.445 and $7.17. Spot was worth $7.14/17, versus $7.29/32 previously.
It fixed at $7.32. Brokers traced support in Comex silver to $7.12 with resistance at the $7.45/50 area. January platinum shed $8.70 to $836.20 an ounce. Spot platinum hit $833.00/838.00.
December palladium eased to $214.50 an ounce, down 60 cents. Spot palladium was last at $211.00/217.00.
Comments
Comments are closed.