FS: Comex under pressure; bargain hunters remain sidelined
Orlando, Florida 12/02/2013 – Gold futures are languishing below $1,650 an ounce, burdened by chart weakness and a lack a volume due to the Lunar New Year holiday.
Gold for April delivery on the Comex division of the New York Mercantile Exchange was last down $3.30 at $1,645.80 an ounce.
The yellow-metal yesterday broke below its 200-day moving average, which served as the catalyst for a strong bout of technical selling. And without Asian physical demand to buoy to market, prices fell to a five week low of $1,639.50.
“We see gold/dollar as under very real duress,” Dennis Gartman, editor of the Gartman Letter, said. “We also suspect that that the margin clerks are sharpening their pencils this morning, for a break below $1,620 in spot terms would almost certainly unleash yet another torrent of selling.”
The noticeable lack of dip buying is evidence of a nervous market, a US-based gold trader said.
“It does look like we are settling into a fresh sub-$1,650 range. Without Asia in the game, there’s not a big push from [Western world] participants to drive prices back up. The risk lies to downside,” the trader said.
The ongoing holiday in China and inattentive Indian importer sentiment left the gold market with little supportive interest overnight, the CME Group said in a market commentary.
“Gold might also have been undermined by news of a rise in fiscal year gold production from Glencore overnight, as slack demand and rising physical supply has seemingly discouraged would-be buyers of gold lately,” CME said.
“With the slide overnight on the charts, April gold also seems to have damaged the charts a bit and that could embolden the bear camp further later today. In the end, expectations of a slow gradual global recovery and adverse currency market action has simply left gold out of favour,” CME added.
Commerzbank AG noted that after an interim recovery this morning, gold’s price slide is also continuing in euros, hitting a weekly low 1,225 euro per ounce.
“The price slump was accompanied by outflows from the gold ETFs, which reduced their holdings by 3.7 tons. At the same time, silver ETFs recorded inflows of close to 74 tons, perpetuating the trend of recent weeks – away from gold ETFs and towards silver, platinum and palladium ETFs,” Commerzbank said.
Comex silver for March delivery was last down 4.5 cents at $30.865 an ounce. Trade has ranged from $30.58 to $30.99.
Platinum futures for April delivery on the Nymex were last up $15.60 at $1,711.70 an ounce and the March palladium contract was at $766.15 an ounce, down $7.55.
Meanwhile, in the wider-markets, the euro was about a third cent stronger at 1.3436 against the dollar, while Germany’s DAX and France’s CAC-40 were up 0.04 percent and 0.44 percent respectively.
As for the more industrial commodities, light sweet crude (WTI) oil futures for March delivery on the Nymex were up 39 cents at $97.42 per barrel and the most-actively traded Comex copper contract was at $3.7375 per pound, up 1.5 cents.
