BU: Gold price at multi-wk low, silver and platinum track falls
Gold declined to its softest since January 8 in thin Tuesday afternoon trading ahead of the imminent start of the Chinese New Year, which resulted in increased volatility.
The yellow metal hit a low of $1.210 before last trading at $1,212.70/1,213, a $18.20 or 1.5-percent decline on Monday’s close.
“Gold looks vulnerable as the market approaches a seasonally weak period,” UBS said in a note. “New Year holidays in China begin tomorrow, and participants will be out through to Tuesday next week. The absence of this key physical market in a sense removes a natural cushion and therefore increases gold’s downside potential should negative catalysts emerge in the coming days.”
In currencies, the euro was last at 1.1409 against the dollar, still down from Monday’s peak of 1.1429, after talks between eurozone finance ministers and Greece stalled.
The European Central Bank (ECB) will decide on Wednesday whether to maintain emergency lending to Greek banks. Greece will have until Friday to request an extension of its previous bailout package after which it will face a default when its 240-billion-euro bailout expires at the end of the month.
“A breakdown in the talks between Greece and the EU have had a surprisingly limited impact on gold prices, with the metal firming up initially before coming under pressure,” Standard Bank’s Leon Westgate said.
“The US holiday yesterday and a lack of Chinese interest probably helped keep the metal in check, even with a ratcheting up in tensions in Ukraine. With gold failing to push on, it seems weak longs were quick to stop out,” Westgate added.
Although the ceasefire in Ukraine that came into effect on Sunday has been broadly observed, shelling continues around the town of Debaltseve and government and separatist rebels have yet to start to withdraw their heavy weaponry from the area, missing a Monday deadline to do so.
Silver tracked gold lower, falling to a January 8 low of $16.32 per ounce, a drop of $1.05. Platinum at $1,181 was at its lowest since December 23, down $23, while palladium slipped $7 to $779/784.
