US gold futures fell more than 1 percent to hold around $440 an ounce early Wednesday on fund selling triggered by a sturdier dollar in thin dealings before the New Year's holiday. Traders said gold's inability to rally on flight-to-safety buying after the devastating Indian Ocean quake tsunamis sparked some long liquidation. Other precious metals also fell, with silver dragged below $7 an ounce.
By 10:20 am EST (1520 GMT) at the COMEX division of the New York Mercantile Exchange, gold for February delivery was down $4.80 at $440.50 an ounce, after hitting a low at $438.50 which marked its cheapest since December 17.
"This is a purely technical move against the dollar," said a COMEX trader. "We saw retail liquidation and that spread into the funds as we took out the 20-day and 50-day moving averages in gold."
Traders said dealer buying to cover short positions was supporting gold and silver above session lows, but the market's overall direction should be guided by currencies.
Gold's price often moves in opposition to the dollar as many investors use as an alternative to US currency.
The 6-year-old euro slid to around $1.3557 after it inched to an all-time peak versus the dollar for the fifth straight trading day, reaching $1.3646.
Brokers pegged chart support in COMEX gold at $438.50 and $436 with initial resistance at $443.
Estimated gold volume was a modest 20,000 contracts by 10 am many participants were out of the market this week for vacations.
New York metals will close early at around noon Thursday and stay shut Friday in observance of New Year's Day, which falls on a Saturday this year. The Tokyo Commodity Exchange is closed for the year. TOCOM activity resumes on January 4.
Spot gold traded at $439.45/0.20 an ounce, down from $443.90/4.60 at Tuesday New York close. Wednesday's afternoon fix in London was $440.25. March silver slipped 16.8 cents or 2.4 percent to $6.89 an ounce, trading from $7.06 to $6.80 which marked its lowest since December 20. Spot slipped to $6.83/85 from $7.00/7.03 previously.
NYMEX front-month January platinum fell $8.80 to $866.50 an ounce. Next active April futures lost $8.30 to $865. Spot touched $863/867.
Floor brokers said the market was focused on rolling long positions out of January platinum.
March palladium fell $4.50 to $184.50 an ounce. Spot traded at $180/185.
Comments
Comments are closed.