Gold Prices Backtrack From Gains , Down 1%
Gold futures fell in electronic trade Wednesday, resuming their decline which has already pulled the front-month contract down by more than 8% so far this week.
Gold for June delivery gave up $14.80, or 1%, to trade at $1,372 an ounce during Asian trading hours.
On Tuesday, gold rose $26.30, or 1.9%, on the Comex division of the New York Mercantile Exchange. The advance followed two consecutive sessions of declines which stripped prices of more than $200 an ounce.
It is likely that “financial markets will continue to take its cues from any further abrupt movements in the price of the precious metal over the short term,” said CMC Markets senior trader Tim Waterer in a note Tuesday.
Gold prices were mauled Monday, marking their largest one-day loss since the 1980s, as they plunged $140.30, or 9.3%, to $1,361.10 an ounce. Read: Gold’s wounds will take time to heal
“While the drastic move lower in the gold price may have been a tad overdone in the eyes of many, the ramifications of the move were felt across a number of other asset classes,” wrote Waterer. “To put it mildly, the gold price free-fall certainly put the cat amongst the pigeons on world markets this week.”
Sentiment in gold has suffered after recent cuts to price forecasts for the metal, as well as outflows from gold exchange-traded products. Goldman Sachs and Morgan Stanley have each cut their price forecasts for gold for this year and next.
Goldman Sachs on Tuesday also cut its short gold recommendation to $1,400, saying exchange-traded-fund holdings show “acceleration in the liquidation of length, which points to a broad-based selloff extending beyond the futures markets, with potential more room to go.”
Meanwhile, May silver on Wednesday gave up a sizeable portion of Tuesday’s gain as it fell 18 cents, or 0.8%, to $23.44 an ounce.
May copper futures fell 3 cents, or 1%, to $3.27 a pound and July platinum futures declined $8.40, or 0.6%, to 1,442.20 an ounce. But palladium for June delivery rose 80 cents, or 0.1%, to $679 an ounce.
Marketwatch
