Gold Falls On Profit Taking After Hitting 2-Month High
SAN FRANCISCO (Aug 19) COMEX gold futures closed today moderately lower in uneventful summertime trading Monday. Early on, the yellow metal hit a two-month high. The bulls have gained upside technical momentum recently. December gold was last down $6.20 at $1,364.60 an ounce. Spot gold was last quoted down $11.60 at $1,366.00. September COMEX silver last traded down $0.222 at $23.115 an ounce. By 3pm EST spot gold was down $14.64 to $1366.46, while silver lost 35 cent sto $$23.17/oz.
The “dog days” of summer are upon the market place and conditions are mostly calmer and quieter. Many North Americans and Europeans are finishing up summer holidays.
The exception to quiet trading worldwide Monday was the sharp drop in the Indian Rupee currency overnight. The Rupee hit a record low versus the U.S. dollar and has been on a sharp downslide recently. This does have the world market place paying attention but not yet overly concerned. Rising interest rates in major economies have pressured the periphery currencies recently.
Indeed, of importance to the entire market place is the continued rise in government bond yields worldwide, with the U.S. 10-year note fetching 2.87% and the German 10-year bund yield at 1.91% on Monday. Both rates are the highest in well over a year. The rising bond yields are an early clue that problematic inflation could creep back into the major world economies at some point down the road.
Traders and investors are still watching the Egypt unrest, which was violent over the weekend. Any escalation in violence is likely to impact the market place, and could prompt a rise in demand for safe-haven assets, including gold.
There was no major U.S. economic data released Monday. Key data points this week will be the Federal Reserve’s FOMC minutes that are released Wednesday and some Chinese economic data on Thursday. There is a world central bankers meeting in Wyoming at mid-week, but Fed Chairman Bernanke will not even attend it and no major proclamations are expected to come out of that event.
