Gold wavers after six straight sessions of losses
San Francisco (June 3) Gold futures wavered between small losses and gains Tuesday after suffering from six sessions of losses in a row, with traders looking ahead to the week’s economic events, including a European Central Bank meeting and the monthly U.S. nonfarm payrolls report.
Gold for August shed $2, or 0.2%, to $1,242 an ounce on the Comex division of the New York Mercantile Exchange. Prices have tallied a loss of roughly 4%, or just over $50 an ounce, over the past six trading sessions.
On Monday, gold hugged levels not seen since late January. May was the worst month of the year and June is hardly showing signs of improvement.
July silver, meanwhile, gained a penny to $18.75 an ounce Tuesday, extending its modest gain from a day earlier, which followed a five session decline.
“The gold market seems to be slanted towards the weak side, trading well below $1,250,” said Jason Rotman, president of Lido Isle Advisors in Newport Beach, Calif.
“We believe gold is really waiting for Friday’s jobs report,” he said. “If the jobs report surprises to the upside, we could see more selling in gold down to $1,235, maybe lower. However, if the jobs number comes in lower than expectations, we could see a short covering rally above $1,250.”
Before the jobs report’s impact on the market hits Friday, there could be some potential curve balls thrown by the European Central Bank when it concludes its meeting on Thursday.
‘Throwing in the towel’
For now, analysts offered downbeat outlooks for the yellow metal.
“We are seeing investors throw in the towel as far as gold is concerned,” said Vedant Mimani, lead portfolio manager of the Atyant Capital Global Opportunities Fund. “Many invested in gold as a hedge against the more orthodox investments such as stocks and bonds, and as those assets continue to perform, despite repeated calls for a correction, and gold continues to languish, investors are giving up on gold.”
But “this sort of capitulation makes us interested in the space once again,” he said.
Analysts at INTL FCStone, a financial services firm that specializes in commodity trading, see further weakness in gold ahead.
“We base this view on the notion that this year’s ‘Black Swan’ event — the Ukrainian crisis — while still potentially dangerous, is turning less ‘black,’” the analyst said.
Last week, gold hit a so-called “death cross,” when the 50-day moving average for gold crossed below the slower-moving 200-day average. Analysts said from a technical perspective, it could mean bigger losses ahead for gold. Read: A ‘death cross’ is haunting gold.
Elsewhere in metals trading, July platinum fell $4.40, or 0.3%, to $1,432.30 an ounce, while September palladium added a $2.30, or 0.3%, to $834.95 an ounce. High-grade copper for July delivery gave up 3 cents, or 1%, to $3.14 a pound.
Shares of gold and silver miners headed broadly lower for a second straight session. The Philadelphia Gold and Silver Index fell 1.1%. Shares of the SPDR Gold Trust declined by 0.1%, while the iShares Silver Trust tacked on 0.1%
