US gold futures drifted to a softer close on Monday, hit by speculative liquidation as a strike by gold miners began as expected. Summer volume in the market remained thin before a US Federal Reserve decision on interest rates on Tuesday, dealers said.
Roughly 100,000 workers in South Africa began their first industry-wide strike in 18 years over the weekend, but little impact on gold prices was seen amid plenty of supply.
"The strike was priced in and the fund buying from last week in gold and silver stopped that's why we came off on liquidation-type selling," said a desk trader in New York.
"It's range-trading now, and we'll wait to see what the dealers want to do," he added. "They might buy a little down here, but you don't know where the next big move is going to be."
Gold for December delivery slipped $2.50 to $440.30 an ounce on the New York Mercantile Exchange's Comex division, after trading between $443.30 and $439.60.
Futures last on Thursday touched a five-week high at $445 an ounce in a rally spawned by a resurgent euro/dollar.
But a steady euro on Monday was not enough to draw fresh buying into gold.
A weaker dollar usually boosts dollar-denominated gold as it becomes cheaper to buy for non-US investors. Midafternoon in New York, the euro was quoted at $1.2361, against $1.2332 late on Friday.
Spot gold last brought $434.60/5.40 an ounce, vs. on Friday's New York close at $437.60/8.30. On Monday's afternoon fix in London was at $436.20.
At a US Fed meeting on Tuesday, policymakers are seen delivering a tenth straight 25 basis-point increase in the benchmark funds rate, taking it to 3.5 percent.
Gold traders said the market also had priced such a rise. Higher US rates tend to boost the dollar and weigh on gold.
Meanwhile in South Africa, gold miners who are demanding higher wages stayed off work on Monday, bringing gold pits in the world's biggest bullion producer to a standstill.
The strike was the latest action in recent weeks in a nation plagued by huge income gaps between the rich and mostly black poor, more than a decade after apartheid's official end.
One lead negotiator representing gold producers estimated a daily loss of around 40,000 ounces and 130 million rand ($20.2 million) in lost revenue per day due to the strike.
IFR Markets analyst Tim Evans pegged technical resistance in Comex December futures at $445 and $446 followed by $451, with downside support seen starting at $436.40 and $432.70.
Estimated volume in Comex gold near the close was thin 31,000 lots, compared with Friday's tally of 58,099 lots. Total open interest rose 9,602 lots to 283,233 lots immediately after the lower close on Friday.
Comex September silver fell 14.3 cents to finish at $7.015 an ounce, dealing from $7.175 to $6.98.
"We still think silver will have a solid Bull Run. eventually, but it may have to fall back further here to regroup first," said Evans, who pegged resistance at $7.33 and psychological support at $7.00.
Spot silver slid to $6.96/7.01, from the prior close at $7.12/15. On Monday's fix was at $7.13. On the board at Nymex, October platinum dropped $8.30 to $902.20 an ounce.
Spot platinum hit $899/902. September palladium fell $1.60 to $190 an ounce. Spot last was at $188/191.
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