Gold futures mark lowest close in 3.5 months
San Francisco (May 27) Gold futures on Tuesday settled at their lowest level in about three-and-a-half months as Ukraine’s election results, technical selling and equity gains combined to pull prices down by 2%.
Gold for June delivery to settle at $1,265.50 an ounce on the Comex division of the New York Mercantile Exchange. Tracking the most-active contracts, prices marked their lowest close since Feb. 7, according to FactSet data. The session’s point and percentage losses were also the largest since mid-April.
July silver lost 35 cents, or 1.8%, to end at $19.07 an ounce. That was the lowest for a most-active contract since May 1.
“With many global equity indices pulling higher, participants appear to be at a loss for any motivation toward buying gold,” said Jonathan Citrin, founder and executive chairman of CitrinGroup.
“The week ahead will lend more insight, and gold is still up on the year,” he said. “But, there seems to be an odd air out there — one of certainly and greed. Such circumstances can punish an asset, or may turn around and punish investors for their overreaching.”
For now, election results in Ukraine helped some analysts key in on technically significant price points for gold.
The “bottom has fallen out from under gold” as “Ukraine concerns (and political risk premiums) fade following last weekend’s decisive election result,” said Colin Cieszynski, senior analyst at CMC Markets, in emailed comments on Tuesday.
Gold was testing “$1,275 channel support,” which could indicate if it is ready to move lower or bounce back, he said. Prices settled well below that level Tuesday.
Billionaire candy maker Petro Poroshenko won Sunday’s election and Russia has said it was willing to engage in dialogue with him.
But Matt Weller, senior technical analyst at Forex.com, pointed out that gold has also failed to get a lift from news of increased violence in eastern Ukraine that’s occurred right after the election.