Precious metals complex mixed, with silver, platinum trading higher
By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Gold futures edged further down from seven-week lows in electronic trading Tuesday, as concern that adequate supply and a still possible downgrade of European nations’ sovereign debt by rating agencies pressured prices.
The precious metal’s futures for February delivery GC2G -0.49% dropped $9.70, or 0.6%, to $1,658.50 an ounce during Asian afternoon hours.
Gold tumbled $48.60, or 2.8%, to finish at its lowest level since Oct. 24 during Monday’s regular session on the Comex division of the New York Mercantile Exchange.
Moody’s said Monday that it still intends to revisit the sovereign debt ratings of all European Union nations early next year, because of the “continued absence of decisive policy measures.”
Gold prices have also been under pressure of late as the precious metal’s supply got a boost from European financial institutions’ efforts to borrow dollars in the interbank markets in exchange for gold.
“Gold is at a critical juncture and its performance over the next few days could signal its next big move,” Robin Bhar, senior metals analyst at Credit Agricole wrote in a note to clients.
“The approach of year-end and the need for [U.S. dollar] to meet funding commitments in an already heightened environment of stresses in the inter-bank lending markets continues to see gold under pressure,” Bhar added.
The analyst added that, if sustained, the increased volume of lending against gold “could act to cap gold prices in the short-term as we witnessed last week, as rallies above $1,760/ounce were quickly capped.”
Overall performance in the precious metals’ complex was mixed, however, with palladium prices also declining, while silver and platinum futures were mildly higher on the back of a weaker U.S. dollar. Read currencies.
The March contract for palladium PA2H -1.21% lost 1.5% to $653.30 an ounce. The January platinum PL2F +0.16% contract rose 0.2% to $1,489.40 an ounce and March silver prices SI2H +0.56% added 0.3% to $31.10 an ounce.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
