Gold traded at five-year lows on Friday after breaking through technical support, with positive US housing data and an increase in Chinese gold reserve holdings conspiring to pressure the complex lower.
Gold for August delivery on the Comex division of the New York Mercantile Exchange fell $12.50 to $1,131.50 per ounce, the lowest level since April 2010.
And spot gold fell to its lowest in five years at around 1515 London time below $1,131. It was last at $1,131.9/1,132.7 per ounce, still down $13.10 on Thursday’s closing level.
“Fridays have not been friendly to gold in US dollar terms,” Dennis Gartman, editor of the Gartman Letter, said. “Given that the supposed support at the $1,445-$1,450 level [has fallen], we fear that that attack may become louder and far more serious as the day progresses.”
In data, US building permits in June were 1.34 million, exceeding the 1.11 million forecast. Housing starts in June were 1.17 million, above the estimates of 1.1 million and near an eight-year high dating back to housing boom of 2007.
Additionally, CPI month-over-month was in line with projections at 0.3 percent, with core CPI also in line with expectations at 0.2 percent.
Preliminary University of Michigan consumer sentiment for July was at 93.3, below consensus of 96. Preliminary UoM inflation expectations of 2.8 percent were above the previous month’s 2.7 percent.
China’s central bank has added 604 tonnes to its gold reserves in the six years since it last published fresh figures on figures, citing the “special circumstances” in which the yellow metal is a good investment product.
As of the end of June 2015, China’s official gold reserves were 53.32 million ounces or around 1,658 tonnes, the PBoC said.
In wider markets, the euro fell for the third consecutive session to 1.0863 against the dollar, a 0.1-percent drop. In equities, Germany’s DAX was down 0.1 percent while France’s CAC-40 was up 0.2 percent.
As for other precious metals, Comex silver for September delivery was down 15.9 cents at $14.825 per ounce. Trade has ranged from $14.820 to $15.005.
Platinum for October delivery declined $12.4 to $999.20 per ounce – its first drop below $1,000 in six years. The most actively traded palladium contract was at $617.90, down $14.05.
(Editing by Tom Jennemann)
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