Without safe haven support, gold charts point to $1,320 an ounce
A stronger dollar on Thursday saw gold giving up $26 or 1.6% to trade at $1,553 an ounce in after-hours dealings.
Marketwatch reports the losses for gold came as the dollar index, a measure of the greenback’s performance against a basket of six major global currencies, turned higher on the day and kept gathering steam.”
August contracts for the precious metal was also hurt by the absence of save-haven buying with the yellow metal being sold off alongside riskier assets such as stocks.
“There’s no semblance of a safe-haven at the moment but as the price goes lower that bid does come back as you maybe get some renewed investor interest – sovereign wealth funds and central banks looking to nibble away and even some physical buying,” SocGen analyst Robin Bhar told the Financial Post
The Vancouver Sun reports Pat Chiefalo, director of derivatives and structured products at National Bank Financial, said in a research note on Thursday gold stocks are “vulnerable in the near term to a technical pullback now that many of them are retreating below their 50-day moving average. The technical profile of bullion is also weak and the metal could potentially drop as low as US$1,320 an ounce”.
Gold is now down 18% from its all-time record high of $1,911.60 an ounce set on September 6 last year. The metal’s 2012 low of $1,535 was hit mid-May.
Platinum slid 1.7% at $1,386 an ounce, palladium gave up 2.7% to change hands at $563 while silver extended a three-day pullback to settle at $26.25.