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Comex Gold Extends Slide On Technically Oriented Selling
By Allen Sykora Kitco NewsFriday May 30, 2014 11:29 AM
(Kitco News) - U.S. gold futures are extending the losses from earlier this week Friday largely on technically oriented selling, traders said.
As of 11:17 a.m. EDT, gold for August delivery was $12.10, or 1%, lower to $1,245 per ounce on the Comex division of the New York Mercantile Exchange. The contract bottomed at $1,243.70, its weakest level since February. July silver was down 24.9 cents, or 1.3%, to $18.765 an ounce.
“It’s technical more than anything else,” said Charles Nedoss, senior market strategist at LaSalle Futures Group.
The market dipped below the roughly $1,250-an-ounce level that was offering support after prior weakness this week. “You picked up some (sell) stops there,” Nedoss said. These are pre-placed orders activated when certain chart points are hit, either to book profits, exit a losing position or establish a fresh one.
Further, when gold could not attract fresh buying at the lows, other traders opted to “throw in the towel,” Nedoss added.
A New York-based desk trader said technical momentum picked up again after the market fell out of its recently tight trading band earlier in the week.
“It’s a continuation of the breakdown we saw Tuesday,” he said. The trader later added, “There is no particular news story that I am aware of today it sending it (down) further…There’s no interest in buying it.”
Overall, he added, the market remains in a consolidation of the huge rally from 2009 to 2011.
Earlier in the week, some of the factors blamed on gold’s decline included a stronger dollar and continued gains in equities; expectations that the European Central Bank might ease monetary policy next week, thereby pressuring the euro; and some abatement of Russia-Ukraine tensions even though fighting continued between Ukrainian forces and pro-Russian separatists.
By Allen Sykora of Kitco News; asykora@kitco.com
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