Gold Ends Down, Hits 4-Mo. Low, on More Technical Selling

San Francisco (May 29)  Gold prices ended the U.S. day session modestly lower and hit another four-month low Thursday as the near-term technical charts continue to firmly favor the bearish camp. A downbeat U.S. gross domestic product report released in the morning did help to lift the gold market up a bit from its daily low. June Comex gold was last down $3.40 at $1,255.90 an ounce. Spot gold was last quoted down $1.60 at $1,257.50. July Comex silver last traded down $0.034 at $19.025 an ounce.

The preliminary U.S. gross domestic product report for the first quarter fell 1.0%, which was a bit worse than market expectations. Adverse winter weather was blamed for the shortfall. Gold did pop a few dollars in the immediate aftermath of the GDP report, but then returned to the moderately lower price levels seen before the report was released.

Trading was quieter overnight with many markets pausing as focus is turning to next week’s monthly monetary policy meeting of the European Central Bank. It’s widely believed the ECB will announce further monetary policy stimulus measures at that meeting. Recent weak European Union economic data and fears of deflation setting in for the EU are solid reasons for the ECB to make a move next week.

A feature in the market place recently has been falling U.S. Treasury bond yields (rising prices). Bond yields have fallen to the lowest levels in almost a year. This “flight-to-quality” buying of T-bonds and T-notes suggests growing trader and investor unease—either from concerns about world economic growth or geopolitical tensions, or both. It could be that the falling Treasury yields also portend the gold market putting in a price bottom soon.

The London P.M. gold fix was $1,255.00 versus the previous P.M. fixing of $1,254.00.