Gold price eyes largest one-day loss more than a week
San Francisco (Jun 3) Gold prices fell on Wednesday, headed for their largest one-day loss in more than a week as investors digested the European Central Bank’s decision to keep interest rates unchanged and followed developments tied to Greece’s long-running debt negotiations.
Gold futures for August delivery GCQ5, -0.90% fell $3.60, or 0.3%, to $1,190.80 an ounce on Comex. Prices haven’t moved much in recent days, though futures gained 0.5% on Tuesday. The yellow metal hasn’t logged a session decline this large since May 26.
July silver SIN5, -1.99% also lost 22.4 cents, or 1.4%, to $16.57 an ounce.
The ECB decision to leave official interest rates unchanged was widely expected but the central bank also provided an upbeat outlook for the eurozone economy and offered a commitment to keep the its stimulus plan going. Check out MarketWatch’s ECB live blog: Mario Draghi in the hot seat
ECB President Mario Draghi said Wednesday that negotiations between Greece and its international lenders are in a “state of flux.”
For now, gold seems to be hit by pre-summer “doldrums,” said Ross Norman, chief executive officer at Sharps Pixley. “In its current mood, it seems little is going to shake gold out of its slumber.”
“To be fair though, gold was not as badly hit by the surge in the U.S. dollar as might have been expected — conversely it has not recently benefited as the dollar has corrected lower,” he said.
On Tuesday, gold settled higher, boosted in part by a decline in the dollar and concerns about Greece’s debt woes. The dollar index DXY, -0.56% edged lower again Wednesday.
“The dollar decline should have been a catalyst to propel gold higher, but it did not,” said Ken Ford, president of Warwick Valley Financial Advisors.
“This could be a warning sign for gold investors that there is still some downside to gold prices moving forward,” he said. “Traders will need to stay on their toes in the next few days because prices will start to get very volatile leading up to the Greek debt announcement.”
In U.S. economic news on Wednesday, a reading on private-sector hiring came in below expectations, but still showed a pick up from the prior month. In addition, a report said the U.S. trade deficit shrank 19.2% in April after hitting a seven-year high in March.
Investors will be looking next toward Friday’s nonfarm payroll report to gain a better sense of the health of the U.S. economy, which could also factor into gold’s moves.
In other metals trading, July platinum PLN5, -0.74% lost $5.40, or 0.5%, to $1,107.50 an ounce, while September palladium PAU5, -1.32% shed $7.60, or 1%, to $760.95 an ounce.
July copper HGN5, -0.29% traded at $2.729 a pound, down less than a cent.
Source: MarketWatch
