Gold eases lower in lackluster trading

San Francisco (Apr 13)  Gold dipped below US$1,200 per troy ounce though again there was little momentum in the metal either way

Traders pointed to a tick up in buy futures, which have risen almost five-fold to 55,700 contracts in a two week span as providing a prop, but even with Greek/German relations crumbling gold investors seem content to sit on their hands.

Earlier in the month, gold was given a reprieve as weaker than expected US economic data put back the likely date for interest rates to go higher.

Citigroup said: “Negative sentiment towards gold as a ‘non-yielding’ asset-class versus equities and bonds is already evident, and the US dollar rally is only on pause in our view.”

Higher US rates and rallying equities have the potential to drive weakness into the next quarter it said.

Citi’s economists said that although Eurozone interest rates are low at the moment as fears of Greek bankruptcy remain, the current level is unsustainable and expect them to be increased within 5 years.

“Our [gold] price expectation into 2H15 remains neutral-to-bearish in the region of $1,180/oz.”

Gold slipped back to US$1,199 today after opening at US$1,207.

Silver also slipped back 0.5% to US$16.29 while platinum eased 1.7% to US$1,152.

Source: ProactiveInvestor