Thursday’s massive meltdown amounting to nearly 4% dragged gold to below $1,200 an ounce for a brief period. It was the worst decline the yellow metal experienced since early February and it ushered in a major technical breakdown on the charts. Gold however was not alone in being abandoned by some investors for the comfort of cash. Disappointing U.S. and Chinese economic indicators also engendered major sell-offs in crude oil, copper and certain equities.
Not much was spared as the mood for risk appetite evaporated with a swiftness not seen since one early day in July just two years ago. The final tally for last night’s closing markets in New York showed gold down $43.00 per ounce at $1199.40 bid side. A major 86 cent decline was seen in silver which fell to $17.76 per ounce. Platinum suffered a $33 loss to finish at the $1500.00 round figure and palladium fell $12 to end at $431.00 per ounce.
This morning’s market action had gold prices all over the place once again as players trying to right the ship encountered plenty of others unwilling to do so and still jumping aboard cash-laden lifeboats. Spot prices ranged from $1202 to $1214 and early corrective gains gave way to more selling as the market opened. On the ‘good news’ front, India’s gold shoppers made a rare (of late) appearance and picked up some bullion on the back of the price slash offered by overseas markets. August brings more festivals and hopefully more gold buying. To be continued...
Spot gold started with modest gains, rising $3.20 per ounce to the $1202.60 level. Recovery, yes, but a feeble one thus far. Previous support at $1225 now becomes resistance. Participants awaited key U.S. jobs and joblessness figures and were more than likely looking beyond the news and to the time when they could close trading books and head for the shore after such an eventful week. Silver opened with a nickel’s worth of gains, quoted at $17.81 the ounce while platinum added $5 to start at the $1505.00 level.
Palladium and rhodium were not quite so lucky; the former lost $2 to open at $429.00 and the latter shed $10 to level off at $2430.00 per troy ounce. Impala Platinum failed to reach a pay agreement with its largest union today. Third-party negotiations are slated to commence on July 19. In other news, Chinese gold output fell by 2% in May and totaled 28.31 tonnes. The country remains the top global gold producer.
Jon Nadler is a Senior Analyst, Kitco Metals Inc. North America