Gold News

Gold Price Drops 'Clean Through Support' as Precious ETFs Shrink, US Jobs Hit Forecast

GOLD PRICE losses of 2.4% for the week so far worsened in London trade Wednesday as global stock markets rose sharply and new US jobs data put net hiring in the world's largest economy just ahead of analyst forecasts for October.
 
Latest US trade data were also better than expected, showing the smallest September deficit between imports and exports since 2012 at $40.8 billion. 
 
The Dollar jumped to new 3-month highs versus the Euro on the currency market.
 
Erasing the last of October's 6.8% gain on Tuesday, the Dollar gold price today dipped further below $1115 per ounce – a new 5.5-year low when first seen in July.
 
"A move below $1155-1145 in gold," said French investment and bullion bank Societe Generale in a technical analysis of chart patterns a week ago, "will confirm possibility of a deeper retracement initially towards $1133 and probably even towards $1120, the lower limit of the daily upward channel."
 
"Major support now lies at $1118," agreed a trading desk note from Swiss refining and finance group MKS yesterday, pointing to the "uptrend since July 20 collapse."
 
Gold's "recent descent is expected to end in the $1131-1122.50 region," added Commerzbank's Axel Rudolph in the German bank's Weekly Technicals report Tuesday.
 
"We thought the 61.8% Fibo level at $1121 would offer support but the metal went clean through it," says Canadian bullion bank and London market maker Scotia Mocatta's daily technical analysis.
 
"Next support comes in at the October low of $1105 and September low of $1100. Sellers will be looking to fade any bounce to $1134."
 
Silver meantime tracked the falling gold price Wednesday, setting fresh 4-week lows of its own beneath $15.20 per ounce.
 
Silver holdings needed to back the iShares Silver Trust (NYSEArca:SLV) shrank again Tuesday as shareholders liquidated stock, extending the 3-year low in global exchange-traded inventories.
 
Palladium prices had meantime rallied earlier today from new 6-week lows, hit Tuesday as ETF outflows also accelerated according to the specialist Platts news and data agency.
 
Platinum prices rallied from 4-week lows, but during October, says Japanese conglomerate Mitsubishi's analyst Jonathan Butler, ETF trust funds holding the metal – primarily used in auto-catalysts for diesel engine vehicles – "saw the heaviest monthly liquidations of the year to date, primarily due to profit taking in the South African funds which reversed the recent net inflows to those products."
 
Gold bullion holdings in the giant SPDR Gold Trust (NYSEArca:GLD) shrank another 3 tonnes yesterday, closing at the smallest level in 5 weeks at 686 tonnes – less than 3% above late-July's new 8-year lows.

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn

 

 

Market Fundamentals