Gold prices declined for the seventh straight session to the lowest price since 2010 as bearish technical trading gripped the market.
Gold for August delivery on the Comex division of the New York Mercantile Exchange fell $25.10 to settle at $1,106.80 per ounce.
Calamity began early as traders in Asia sold five percent of the precious metal’s value in the first couple minutes of the market opening. The resulting shockwave finally relented at $1,080.00, the lowest price since April 2010.
“It was a technical selloff as opposed to anything else,” Dave Meger, director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “No selloff in any other markets. You noticed the equity markets didn’t move.”
The Dow Jones Industrial average and S&P were each up 0.2 percent, while the euro was 0.1 percent stronger at $1.0836 against the dollar.
Reminiscent of the equities flash crash in 2010 or the treasury collapse in October of last year, some market observers are drawing similarities to previous episodes of rapid price volaility.
“It was panic selling on the (Asian) open…kind of a like a flash crash,” a high frequency trader (HFT) said.
The market remains significantly short – the latest CFTC data for the week ending July 14 showed that the net fund length dropped to 47.8k lots while gross shorts remain near record highs. Outflows also continued in ETF markets followed by FastMarkets. ETF holdings are now at their lowest level this year as of July 17 at 1,576 tonnes, down 11.52.
In the eurozone, Greece banks reopened today after three weeks of closure, but capital controls and restrictions remain in place for withdrawals. The Mediterranean country started its repayment to international creditors today after a third bailout programme was approved.
In data today, German PPI month-over-month in June was down 0.1 percent, below forecasts of a null change. EU current account in May was 18 billion, better than expectations of 23.1 billion.
As for other precious metals, Comex silver for September delivery was last down 7.9 cents $14.775 per ounce. Trade has ranged from $14.490 to $14.980.
Platinum for October delivery fell $15.50 to $985.80 per ounce, while the most actively traded palladium contract was at $608.40, down $10.60.
(Editing by Tom Jennemann)
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