A renewed slide in gold prices commenced shortly after the release of the Fed’s Beige Book on Wednesday afternoon and it then intensified into Thursday with the parsing of the Bernanke Congressional testimony.
The final trading session of this once again indecisive week in gold commenced with a price drop. The yellow metal erased Thursday’s gains and retreated to under $1,575 in slow pre-market action as the US dollar picked up some steam.
The US dollar broke substantially above the pivotal 80.00 mark on the trade-weighted index this morning, prompting fairly sizeable selling in the precious metals’ complex. Spot gold fell to an overnight low of $1,705 while spot silver showed bids near $31.80 per ounce.
The final session of the week saw gold dipping sharply as a mild revival in the US dollar’s strength prompted speculators to lock in short-term profits and sel. Friday morning’s low was touched at $1,655 after the yellow metal lost nearly $20 an ounce and fell below its 200-DMA once again.
Most commodities gained this morning as lingering optimism related to future demand was still manifest in the wake of China’s easing of bank reserve requirements and following perceptions that the European deal with Greece will be good for the sector in the near-term.
Last week’s wide price swings continued to befuddle and frustrate speculators in the commodities’ space and for a fourth consecutive week the results revealed that hedge fund players placed their bets incorrectly in these markets.
Gold spot prices opened with losses on the order of about $10 and near the support level that the $1,650 area is thought to be able to now offer. Silver dropped nearly 50 cents and started the midweek session out under the $30.50 mark per ounce.
Spot metals dealings in New York this morning opened on the plus side for all components in the complex but gold. The yellow metal was quoted at $1,591 down about $3 while silver climbed 15 cents to $28.68 the ounce.
The new trading week was off to a rocky start in precious metals as, despite only a relatively small, 0.20% advance in US dollar (to just above 83.80 on the index) the complex headed for lower price ground overnight and at the opening bell in New York.