The Selling Continues
Today’s selling continued to day’s trading resulting in a strong drawdown in both gold and silver with futures gold closing down $13.50 currently fixed at $1,242 an ounce. At the same time, spot gold gave up $14 in trading today and is currently fixed at $1,241 32.
Today’s dramatically lower pricing in gold is a combination of extreme dollar strength coupled with traders aggressively bidding gold prices lower. According to the Kitco gold index the $14 drawdown in today’s trading activity can be broken down into its two primary components; a $-7.70 which is directly attributable to dollar strength which is added to a decline of $6.30 which is the direct result of traders selling gold.
This strong decline in gold and silver pricing today seem to be as the outcome of the continued escalation of the current trade dispute between the United States and China which is now morphing into a full-blown trade war.
According to MarketWatch “Gold suffered for back-to-back losses Wednesday, dragged lower as trade tensions between the U.S. and China intensified, raising concerns over demand for industrial metals and sending copper prices to their lowest finish in almost a year.”
According to Jeff Wright, Executive Vice President at gold mining Inc. told MarketWatch that: gold is getting pushed down the broader selloff in copper and zinc.
New comments from the White House but on Wednesday underlined his call for allies to increase their military spending at the outset of this week’s North Atlantic’s Treaty organization summit in Brussels.
Lastly it was extreme dollar strength that would the final nail in today’s lower pricing taking away roughly 6.65% of value, which directly adds to today’s dollar weakness. All things being equal we can look for a retest of the recent lows when gold touched upon $1240 last week.
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Wishing you as always, good trading,
By Gary WagnerContributing tokitco.com
Follow @garyswagner
gary@thegoldforecast.comwww.thegoldforecast.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.