Gold prices tumbled to the lowest price since April 2010 during Friday’s session as positive US housing data, a stronger dollar and release of China gold reserve data motivated the the bears.
Gold for August delivery on the Comex division of the New York Mercantile Exchange fell $12.00 to close at $1,131.90 per ounce, the lowest level since April 2010 and the sixth consecutive session of declines.
A combination of US housing data hitting eight-year highs and the Chinese government announcing 604 tonnes of added gold to their reserves, forced the yellow-metal below technical support.
Gold’s break below $1,141 might lead to stop-loss selling that could open the way to a potential decline to $1,100, Edward Meir, an analyst at INTL FCStone, suggested.
In the aforementioned US housing data, 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 US equities, the Dow Jones industrial average was down 0.3 percent, while the S&P was unchanged. The dollar was 0.2 percent stronger at $1.0854 against the euro.
As for other precious metals, Comex silver for September delivery was down 13.4 cents at $14.850 per ounce. Trade has ranged from $14.795 to $15.005.
Platinum for October delivery declined $10.80 to $1,008.20 per ounce. Earlier, the price dropped below $1,000 for the first time in six years. The most actively traded palladium contract was at $617.40, down $14.55.
(Editing by Tom Jennemann)
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