This morning’s indications showed gold and silver partially reversing yesterday’s losses with modest gains on the order of $4 and 11 cents, respectively. On the other hand, platinum and palladium each advanced by about one percent in the cash markets.
Wednesday morning trading action lifted the precious metals a tad higher as speculators figured that the latest batch of economic data from the US, China, Germany, and the UK would convince central banks involved to take stimulative monetary action.
This morning’s opening action in metals brought fresh selling in the complex with platinum and palladium getting hit especially hard. The former was down $21 at $1,402 and the latter fell $18 to $576 –just $13 above its one-year low. Gold spot declined $10 to $1,562.
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.
Gold prices rallied by more than 2% on Thursday and by nearly 1% early this morning as the US dollar appeared to slow its upward progress on the trade weighted index. Nevertheless, the dollar – trimmed gains and all – was still up for a 15th day in a row in pre-market action.
The US dollar and stock index futures frowned upon the GDP estimate and headed lower. The development may give gold players another chance at trying to go for the assault on the $1,660-$1,675 resistance area.
Spot dealings opened with a bid-side quoted at $1,667 in gold and at $32.50 in silver. While there is still scope for attempts at taking out overhead resistance near $1,680 and $1,704 in gold (with a possible $1,730 end-target) the going has been anything but smooth.
Last year’s ETF gold demand stands at the lowest annual level since these vehicles were launched late in 2004. Many ETF speculators still hold large positions, but recent price drops and rising volatility have eroded a portion of the belief that gold is always a “safe haven” investment.
Precious metals – with the exception of palladium – opened mildly higher this morning in New York as players awaited US GDP and consumer sentiment data with a degree of caution and as profit-takers stood by to possibly pull the trigger.