Comex Gold Slips Below Unchanged on Profit Taking

By Jim Wyckoff
04 May 2010, 10:53 a.m.

Profit-taking pressure has hit the gold futures market Tuesday, as some traders decided to ring the cash register after recent solid gains that pushed June futures prices to a fresh five-month high of $1,193.80 early on.

June gold was last traded down $7.00 an ounce at $1,176.20. Sharp gains in the U.S. dollar index are also adding to some selling interest in gold Tuesday. The dollar index hit a fresh 12-month high and the Euro currency hit a fresh 12-month low amid the European Union's debt crisis that just will not abate. The EU debt worries are prompting strong sell offs in many markets, including the U.S. stock indexes and crude oil prices. However, if recent history once again plays out, look for some bargain-hunting buying interest to surface in gold on price weakness. The "buy-the-dip" mentality among gold traders has been playing out recently. Also, strong investor demand for physical gold from European traders will act to mitigate any sustained selling pressure in gold.

By Jim Wyckoff, contributing to Kitco News; jim@jimwyckoff.com