Gold Price Down Despite Rising Negative Sentiment

(CEP News) - Some of the luster is coming off gold this week as prices continues to lose ground after hitting $1,000 in February.

Weaker equity markets and rising risk aversion sentiment is not providing any support for gold prices, which continue to fall lower. CBOT spot gold prices are down over $4 to $938.22 an ounce.

Gold prices have seen a steady decline since breaking $1,000 on February 20. Investors needing to raise capital to cover margin calls could be the reason behind the sharp drop in gold prices according to some market strategists.

Negative sentiment rose over night following news that the Government would increase its stake in AIG, providing the insurance company with an extra $30 billion.

Mike Glaser, futures broker at LaSalle Futures said he is currently sitting on the sidelines as gold prices remain volatile. He added there appears to be strong support between $900 and $930.

Dennis Gartman of the Gartman letter said he is also sitting on the sidelines because of anecdotal evidence that demand for gold is starting to wane. He added the bullish trade for gold is becoming “crowded.”

Commodity strategists from Barclays Capital pointed out that they are seeing a less demand for Gold Exchange Traded Funds (ETF), which could limit any futures gains. “It is likely that fresh impetus would be needed to re-ignite the investment interest needed both to offset weak jewellery demand and increased scrap supply,” they said.

WTI Crude oil is down $4.63 to $40.13 while ICE crude oil is trading down $4.17 to $42.18.

Meanwhile, ICE RBOB gasoline futures are down $1.70 to $137.25 and Globex natural gas is down $0.01 to $1.26. Heating oil at the ICE is down $2.65 to $126.75.

In the mining sector, spot gold is trading down $4.75 to $937.60 USD. In Canadian dollars, gold is up $7.57 to C$1209.55. Silver contracts at the CBOT are down $0.28 to $12.85.

Bloomberg’s index for base metals is down 2.28 points to 107.83. Wheat futures at the CBOT are down $16.50 to $505.00.

All data taken at 11:52 a.m. EST

By Neils Christensen, neilsc@economicnews.ca

The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.

A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.

Posted in Categories: Canada, Commodities, Economy, Eurozone, Releases, USA.

If you like this article please...

Subscribe by RSS Subscribe by Email

Email This Post To A Friend

Commodities Silver ETFs: More Gains To Come? Oil Seems Like It’s Going Nowhere… But The Story Is Very Different Below The Surface Distorted IEA Oil Reserve Figures Create Biofuel Opportunities In “White Gold” Region Of Central Asia The Simplest Reason Gold Will Soar Physical Gold, Silver And Oil Out-Performing Their Stocks? Silver Hits New Highs At Top Of Uptrend Channel Gold Has Just Barely Entered The Gravity-Free Zone More Than Just Mines: A Look At Other Ways To Profit From Coal, Copper And Ore China Owns The Heavy Stone Has Gold Just Broken Out Of Its Trend Channel? Read More »	Financials Stock Market Briefs: Twitter May Consider IPO, Tyson Foods Beats Estimates Don’t Count Out Actively Managed ETFs U.S. Bank Failures Reach 124 Financial ETFs Still Remain Vulnerable Ron Paul Thinks That Fed “Oversight Is Laughable” Buffett Borrows For Rail Acquisition Investment Ideas: Here Are 3 Dirt Cheap Stocks Treasury To Auction TARP Warrants Dear Reader, We Cannot Criticize Goldman Sachs. Instead, We Admire It 2010 Outlook For The US Banking Industry Read More »	Exchange Traded Funds Protect Yourself Against An Imminent Stock Market Correction Japan ETFs: The New War They’re Waging India ETFs: Too Much, Too Soon? ETF Update: Health Stocks And Health Care Legislation Biggest Gainer ETFs For The Week Ended 22 Nov What You Should Know About Precious Metals ETFs And Taxes Main Street Vs. Wall Street: Using ETFs To Capitalize Why You Should Watch This Leisure & Entertainment ETF Biotech Investing: Spread Your Risks With ETFs The Forgotten Commodity - Rice Read More »
Stocks A Different Look At Recent Breadth Divergences In The NYSE Insider Selling Can Be An Important Tool In Determining Potential Trouble For Both Individual Stocks And The Broader Market Stock Picks For Tuesday: Curis, THQ And DryShips Buy Microsoft Stock As It Transits Into The Cloud-Computing Revolution Chart Of The Week: No More Easy Money For Volatility Sellers? 2009 Best Small Companies Part 3 Why Is Pimco’s Bill Gross Investing In Utilities? Morning Movers: LDK Solar, Origin Agritec, USG Stocks To Watch On Monday Thanksgiving Week: Stock Trading Tends To Be Less Bullish Read More »	Forex EUR/USD Lower In Asia Trading Forex Trading Ideas: Is Sterling About To Get Pounded? AUD/USD Loses Momentum After Testing The 200-Hour Moving Average Fed Comments Revive Risk Appetite, Sending US Dollar Lower Structural US Dollar Weakness Persists Australian Dollar: Caution Canadian Dollar: Caution Forex Traders Await Tuesday’s German IFO Report Better Existing Home Data Leads To Some US Dollar Buying Swiss Franc: The Downside Prevails Read More »	Economy Government Debt - The New Subprime? Heeding The Populist Call Here’s A Sector To Short Cartoon: This Unemployment Line Seems Different 29 Retailers You’ll Have A Harder Time Finding After 2009 Emerging Markets Consider Capital Controls To Combat “Hot Money” Inflows Despite Recession, Innovation Is Alive And Well What Is Ron Paul’s Real Agenda When He Talks About Auditing The Fed China: A Riddle Wrapped In An Enigma Should A House Be Treated As A Great Investment? Read More »