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Comex Gold Extends Slide On Technically Oriented Selling

By Allen Sykora Kitco News
Friday 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

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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