Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Pre-COVID US Economy Wasn’t All That Great Either - 4th Dec 20
Bitcoin Breath Taking Surge - Crypto Trading Event - 4th Dec 20
Platinum Begins A New Rally – Gold & Silver Will Follow - 4th Dec 20
Don't Let the Silver (and Gold) Bull Shake You Off! - 4th Dec 20
Stronger Risk Appetite Sends Gold below $1,800 - 4th Dec 20
A new “miracle compound” is set to take over the biotech market - 4th Dec 20
Eiro-group Review –The power of trading education - 4th Dec 20
Early Investors set to win big as FDA fast-tracks this ancient medicine - 3rd Dec 20
New PC System Switch On, Where's Windows 10 Licence Key? Overclockers UK OEM Review (5) - 3rd Dec 20
Poundland Budget Christmas Decorations Shopping 2020 to Beat the Corona Economic Depression - 3rd Dec 20
What is the right type of insurance for you, and how do you find it? - 3rd Dec 20
What Are the 3 Stocks That Will Benefit from Covid-19? - 3rd Dec 20
Gold & the USDX: Correlations - 2nd Dec 20
How An Ancient Medicine Is Taking On The $16 Trillion Pharmaceutical Industry - 2nd Dec 20
Amazon Black Friday vs Prime Day vs Cyber Monday, Which are Real or Fake Sales - 1st Dec 20
The No.1 Biotech Stock for 2021 - 1st Dec 20
Stocks Bears Last Chance Before Market Rally To SPX 4200 In 2021 - 1st Dec 20
Globalists Poised for a “Great Reset” – Any Role for Gold? - 1st Dec 20
How to Get FREE REAL Christmas Tree 2020! Easy DIY Money Saving - 1st Dec 20
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Shorts Risk "Overstretch" as Technicians Target $1180

Commodities / Gold and Silver 2013 Nov 25, 2013 - 01:17 PM GMT

By: Adrian_Ash


LAST WEEK's losses of 3.6% in gold were extended Monday morning, with silver also falling again as world stock markets rose yet again.

Priced in Dollars, gold dropped below $1230 per ounce for the first time since the first week of July.

Silver added to last week's 4.5% drop against the Dollar to hit 3-month lows at $19.61.

Gold in British Pounds fell to new 39-month lows beneath £760 per ounce.

"With the Fed perhaps stepping back" from QE money-printing stimulus, says Jeffrey Sherman, a manager at the $53 billion DoubleLine Capital in Los Angeles, quoted by Bloomberg, "it's hard to make a case for inflationary behavior out there.

"People aren't as worried about inflation, thus you're not seeing people buying gold."

"Downside risks predominate in the short term," says a note from German investment bank and bullion retailer Commerzbank, saying that in Dollar terms gold "may well test the $1180 mark – its three-year low from the end of June."

Having called $1240 the "next support" late Friday, bulllion bank and market maker Scotia Mocatta's technical analysis also points to $1180, "the 100% retracement" of this summer's rally.

"The big issue is still the monetary tightening in the US," says analyst Michael Widmer at Bank of America Merrill Lynch.

"As soon as [tapering] comes back, you will get further downward pressure."

"Absenting any change in the direction of the Dollar," agrees Jonathan Butler at Japanese conglomerate Mitsubishi, "gold could continue to retrace its late June low of $1180, at which point physical demand [from Asia] may re-emerge."

Despite holding at an $11 premium per ounce above the price of London settlement, Chinese gold prices also fell Monday in subdued trade.

Compared to China's GDP, private spending on gold has risen twice as fast in 2013 to date according to analysis by BullionVault.

Speculators trading US derivatives last week raised their net betting that the US Dollar will rise against other currencies by almost one-fifth to more than $15 billion.

Gold futures and options trading meantime saw speculative players cut their net betting on higher gold by 14%, down to the lowest level since early August.

Equal last week to fewer than 240 tonnes (including small as well as larger, hedge fund traders) the speculative net long position on gold averaged 722 tonnes in the five years to end-2012.

It's so far averaged 332 tonnes equivalent in 2013.

"Gold still looks like a good short in our view," the Wall Street Journal quoted technical strategist Chris Verrone at brokerage and money-managers Strategas Research Partners in New York on Friday, also targeting a fall to $1180.

But now, warns a technical analysis from French investment bank and London bullion market makers Societe Generale today, "The daily indicators are testing supports and [are] overstretched.

"This suggests caution" says SocGen, with $1222 acting as "a key support".

On the equity markets, meantime, the FTSE100 index here in London briefly poked its head above 6,700 for the fourth time in a week, but held 2% below June's near 6-year high.

Futures trading in New York's S&P500 index today put it ready to open above 1800 for the first time ever.

"External markets continue to create an unfavourable backdrop for gold," notes Barclays Captial.

"The physical market [meantime] lends little support during the seasonally strong period for consumption."

By Adrian Ash

Gold price chart, no delay   |   Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Adrian Ash Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules