The gold price failed to top its three-day running streak this yesterday and is in retreat for its second session this morning, having fallen back from a one-month high. The recent rally appears to have stalled but it may disappear should the U.S. dollar begin to rally.
Wholesale quotes for gold bounced from one-week lows beneath $1,270 per ounce Tuesday morning in London, turning higher as Asian and European stock markets failed to extend Monday's rise to new all-time highs in U.S. equities.
Citi is looking for gold to average $1,255/oz in 2014. The bank believes Chinese physical demand will ‘represent a key source of price support for the gold market…and we believe renewed positive buying momentum in China will prevent a wholesale rout of gold prices.’
Gold climbed for its third session breaking the psychological $1,300/oz barrier helped by the weak U.S. dollar. South African miners noted that platinum group metals fell 18.9% and gold production fell 14.1% in June due to labor turbulence.
Gold and silver prices whipped sharply Friday lunchtime in London, as new U.S. jobs data matched analyst forecasts with a 175,000 rise in Non-Farm Payrolls for May and a slight rise in the jobless rate to 7.6%.
Hedge-fund managers are making the biggest ever bet against gold as billionaire George Soros sold holdings last quarter and Goldman Sachs Group Inc. predicted more declines after the longest slump in four years.
Chinese housewives or “aunties” have purchased 300 tons of the yellow metal in the past three weeks amounting in nearly $16 billion. The impact of the run on physical gold in China may have a significant effect on import statistics.
Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock Inc., the world’s biggest money manager, said it’s still bullish.
Precious metals prices headed substantially lower this morning as European and Fed-related worries resurfaced with a vengeance only two or so weeks after markets envisioned certain developments to open up a one-way path to significantly higher prices.