Gold's best rally in ten weeks came to a halt and prices reversed course early this morning as the reality check that most markets were being subjected to by global investors took its toll. The yellow metal slipped back to under the $1,600 pivot point.
Signs that at least parts of the global economy continue to show a degree of immunity to the unfolding European crisis lifted trading spirits in various asset markets. Risk appetite made reappearances in gold, crude oil, copper and assorted equities.
After logging six losing sessions that neared 5% and touching important must-not-break support near $1,520 an ounce, gold prices recovered as the final trading session of a quite turbulent year got underway this morning.
The week that was supposed to be a calm and mostly boring one for gold and other precious metals players turned uglier by the minute as sellers demolished one support level after another and took no prisoners.
Gold prices drifted even lower overnight and this morning as year-end sellers once again cashed still-profitable chips in and opted to park proceeds in cash at least until the first week of 2012 draws to a close.
The trading environment remained thin and bereft of much energy as the abbreviated market week reopened for business in New York this morning. Overnight, gold breached the pivotal $1,600 mark once again and fell to lows near $1,590.
Gold prices remained confined to a tight, smaller than $20 range for a second day as trading in metals wound down further and as business slowly got underway this morning. The action was once again defined by the absence of general sentiment change.
Market action began to slow and participation commenced thinning out in the precious metals' space as the pre-holiday week got started this morning. Gold prices dipped under the $1,600 pivot point once again overnight and then clung to small gains.
Gold's largest decline since September not only managed to change the price tags on various bullion items by a significant margin, but it has also altered the sentiment among market participants by a notable degree.