MW: Gold sells off, down nearly 2% to stand at three-month lows
By Claudia Assis and April H. Lee, MarketWatch
SAN FRANCISCO (MarketWatch) -- Selling momentum held center stage in the gold market Tuesday, with futures on the precious metal declining nearly 2% to trade at three-month lows.
Gold for August delivery lost $21.80, or 1.8%, to $1,161.20 an ounce on the New York Mercantile Exchange. A close around these levels would be gold's lowest in three months and mark a decrease of nearly 8% from the record high of $1,258.30 set June 18.
Gold started out the session in the black, supported by a softer U.S. dollar, but retreated in the face of a pair of reports on the U.S. economy.
Home prices rose for a second straight month in May, the Case-Shiller index showed, but this doesn't indicate a sustained recovery for the housing market is in the cards. Separately, consumer confidence fell in July on concerns about jobs and business conditions. See more on the Conference Board's latest confidence survey. See more on the S&P/Case-Shiller data on home prices in 20 U.S. metropolitan areas.
The reports failed to spark any safe-haven buying for gold because investors are more concerned about gold's technical position than about macroeconomics.
As gold broke below $1,175 an ounce, it triggered sell-stop orders -- automatic selling once prices hit a level previously determined by investors -- that intensified the fall, said Bill O'Neill, a principal at Logic Advisors in New Jersey.
"We're just not seeing any interest coming into gold. The flight-to-safety pattern ... is just not there," he said.
"At the least at the moment the atmosphere is not conducive for gold. ... The (European) sovereign situation at least for now is far calmer," O'Neill continued.
In foreign-exchange trading, the euro gained on the dollar, broaching the $1.30 mark. See Currencies.
Holdings at SPDR Gold Trust (GLD 113.51, -2.01, -1.74%) , the world's largest exchange-traded fund backed by gold, fell to 1,301 metric tons on Monday. Holdings have steadily fallen since the fund hit a record 1,320 metric tons late last month.
But not all is doom and gloom for gold, as demand in top consumer India is set to pick up ahead of the busy festival season, starting in late August and extending until November, analyst Pradeep Unni at Richcomm Global in Dubai said in a note to clients.
