Gold consolidated just below $1,200 per ounce on Monday as a stronger dollar pushed the yellow-metal below technical support.
Gold for June delivery on the Comex division of the New York Mercantile Exchange was last down $6.40 at $1,198.20 per ounce. Trade has ranged from $1,197.40 to $1,209.30.
“Gold, having failed to hold above the 38.2 percent Fibonacci at $1,205, is now pulling back to retest support above the upper tolerance limit (UTL) at $1,196,” FastMarkets’ analyst Tom Moore said. “Renewed dollar strength, which is pushing back towards the March high of 100.4, continues to cap upside price potential.”
In the wider-markets, the dollar remain stout, climbing another 0.56 percent to 1.0543 against the euro, while Germany’s DAX and France’s CAC-40 were slightly weaker. In Asia, the Nikkei was unchanged but the Hang Seng posted a 2.73 percent gain.
In gold specific data, the Commodity Futures Trading Commission (CFTC) reported that the Comex speculative traders increased their net-long positions in gold to 100,757 contracts, which marks a five week high, up from 80,019 a week earlier.
“This makes it all the more clear that the latest surge in the gold price was largely driven by speculation and is thus on a shaky footing,” Commerzbank said.
The rise in the net long speculative length for the third consecutive week was attributable to both short-covering and long liquidation, pushing the net length slightly above its 2014 average, FastMarkets analyst Boris Mikanikrezai noted.
“We believe that the continued strength in prices eventually led speculators to reduce their bearish stance toward the metal,” Mikanikrezai said. “We would be inclined to think that there is further scope for long accumulation and short-covering in the next few weeks.”
In data, China’s trade balance shrank to $3.1 billion from February’s $60.6 billion – a fall of 95 percent and the lowest reading in a year. A reading of $43.4 billion had been forecast.
Meanwhile, the World Bank estimated that Chinese economic growth could slow from 7.4 percent to 7.1 percent in 2015 and seven percent in 2016, down from earlier estimates of 7.2 percent and 7.1 percent.
Elsewhere, Italian industrial production was better than the expected 0.5 percent at 0.6 percent. Still to come is the US Federal budget balance.
As for the other precious metals, Comex silver for May delivery were up 14.2 cents at $16.240 per ounce. Trade has ranged from $16.235 to $16.510.
Platinum futures for July delivery for July delivery on the Nymex were down $13.80 at $1,156.80 per ounce, while the most-actively traded palladium contract was at $778.85 per ounce, up $2.80.
The post Gold tips below $1,200/oz on dollar strength appeared first on The Bullion Desk.
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