US gold futures slipped early on Thursday as speculative sellers pushed prices down through prior lows, setting off stop loss orders, using a firmer dollar and a rise in longer-dated US interest rates as the trigger, analysts said.
"It does look like people are focusing more on the interest rate side of things. To some extent that's logical because a dramatic rise in longer yields at some point would prolong the housing slump, complicate things in the auto sector, weigh on investment and consumer spending. All those things added together would eventually bring down inflation," said Patrick Fearon, precious metals analyst at A.G. Edwards & Sons.
Most-active gold futures for August on the COMEX division of the New York Mercantile Exchange slipped $8.90 to $651.20 an ounce, near the session low of $651.0, a level dating back one week. On Tuesday, August gold set a high at $665.80, last seen on June 8.
In the short term, a liquidity squeeze brought on by rising interest rates could make some investors cautious about assets like gold. COMEX estimated gold volume at 39,918 lots at 10:00 am EDT.
Threats to mine supplies in South Africa have provided some underpinning to prices. Late Wednesday, South African trade unions declared a dispute, the first legal step toward a strike, after the country's three biggest gold producers failed to submit a wage offer, the union said.
South Africa is the world's biggest gold producer. In 2005, the first industry-wide strike there in 18 years paralysed production for five days. The contract that ended the 2005 strike expires on June 30. Spot gold fell to $648.20/648.80 an ounce in Thursday's activity, off $654.50/6.0 an ounce late Wednesday. On Tuesday, it set a 10-day high $661.40 an ounce.
London banks set the gold fix lower at $650.50 an ounce. COMEX July silver lost 14.0 cents to $13.11 an ounce, moving the range down to $13.06 to $13.2650. Spot silver fell to $13.10/13.14 an ounce from $13.21/3.25 an ounce in late Wednesday trade. London silver was fixed lower at $13.17 an ounce. NYMEX July platinum slipped $4.80 to $1,296.0 an ounce. Spot platinum ease to $1,288/1,292 an ounce. September palladium added $1.30 to $381.20 an ounce. Spot palladium edged up to $374.0/377.0.
Comments
Comments are closed for this article.