Selling from liquidation in bullion exchange-traded funds and chart-based sales sent US gold futures to a lower finish for a second straight day on Thursday, as slumping copper prices helped keep the precious metal below $660 an ounce.
Most-active gold for June delivery on the Comex division of the New York Mercantile Exchange was down $4.30 at $657.20 an ounce, after trading between $654.10 and $665.30. "We broke through major support levels in the gold, and there was also follow-through liquidation from the ETFs. So there's a lot of pressure on the metals this," said one New York dealer.
streetcar's gold shares, the world's largest gold ETFs, accounting for more than 80 percent of the metal held by all such funds, dropped 8 tonnes of its bullion in one day on Wednesday.
The dealer said a slide in US copper futures on Thursday hurt the entire precious metals complex. Copper's decline followed a 3 percent drop Wednesday. US copper futures ended down another 3.4 percent on Thursday.
On Wednesday, a combination of heavy liquidation by funds, a stronger dollar and lower crude oil drove US gold and silver futures to their lowest finishes in two months. The dollar rose against the euro Thursday after data showed surprising strength in the US job market and business activity, supporting the view that US interest rates will stay on hold for some time.
A stronger greenback makes gold pricier for investors holding other currencies. Jon Nodular, analyst at Kitco Bullion Dealers, said in a note that the recent US economic indicators, including the solid factory output figures, weak housing data, mild inflation and wage declines, offered mixed signals to metals traders.
Nadler said the market could be volatile and without a clear direction in the short term. "The weights appear to be piling up on the sell side for the moment," he said.
Gold prices have been rising in recent weeks toward their 27-year peak of $730, set last May, but have failed to break the psychological $700 mark this year.
The market ignored the news of a possible work stoppage at a gold mine in Peru. Workers at Latin America's biggest gold mine, Peru's Yanacocha, have failed to reach a pay deal with management after a week of talks and are considering a strike, a union leader said on Wednesday.
Industry-sponsored World Gold Council said on Wednesday global gold demand in the first quarter rose 4 percent year-on-year to 831.7 tonnes as less volatile prices boosted jewellery consumption.
Spot gold was quoted at $657.30/8.80, versus $661.60/3.10 late on Wednesday. The London gold fix was set at $663.20. Silver tracked gold's decline. On Wednesday, it fell below $13.00 an ounce for the first time since mid-March.
Comex July silver finished down 4.70 cents at $12.883 an ounce, after traded from $12.760 to $13.015. Spot silver was quoted at $12.81/2.86, which was off from $12.88/2.91 on Wednesday in New York.
In London, silver was fixed at $12.90. July platinum dropped $7.90 to end at $1,317.90 an ounce. Spot platinum was quoted at $1,300.00/1,305.00. June palladium closed up $2.90 at $360.40 an ounce. Spot palladium fetched $356.00/360.00.
Comments
Comments are closed.