Amwal Al Ghad English - 2015-02-18 17:43:35
Gold futures headed for their second straight session of losses on Wednesday, dropping below $1,200 an ounce and threatening to log their lowest settlement in almost seven weeks.
Chinese buyers were out for the Lunar New Year holiday and traders looked ahead to the release of minutes from the Federal Reserve’s January policy meeting.
“It seems that, for the most part, gold doesn’t care much about Greece,” said Adam Koos, president of Libertas Wealth Management Group, adding the Lunar New Year holiday has begun “and the lack of traders in the market as a result was definitely a factor” for gold. Officially, the Lunar New Year begins Thursday.
“We should expect a small drought in support from China’s gold bulls until next Tuesday, when their vacation ends,” he said.
Gold for April delivery GCJ5, -0.82% fell $8.70, or 0.7%, to $1,199.90 an ounce on Comex, following a loss of 1.5% on Tuesday. Prices, based on the most-active contracts, haven’t closed below $1,200 since Jan. 2.
Meanwhile, March silver SIH5, -0.32% was little changed at $16.385 an ounce.
Commodities analysts at Commerzbank noted Wednesday that gold and silver had both fallen below a key chart level — “the technically important 100-day moving average, which doubtless sparked technical follow-up selling.”
“Two Federal Reserve presidents have spoken out in favour of a sooner interest-rate hike in the U.S., which caused yields on 10-year U.S. [Treasurys] to surge and weighed on the gold price,” the analysts added in emailed comments Wednesday.
Minutes from the Federal Open Market Committee’s January meeting will be released shortly after the gold market on Comex closes. At the meeting in January, Federal Reserve officials told investors they would be “patient” about hiking short-term interest rates.
“Gold will likely find a soft landing if the minutes reflect a dovish tone,” said Koos. “However, policy speculation has definitely been shifting toward a potential rise in interest rates sometime in 2015 — it’s also been hinted at by a few of the Fed officials.” More»