Gold Futures Drift Lower With Oil In Quiet Holiday-Thinned Trading
New York (Dec 28) Gold futures eased with crude oil Monday in a quiet holiday-thinned trading session, during which the yellow metal held in a narrow trading band.
As of 1:05 p.m. EST, Comex February gold was $6.70, or 0.6%, lower at $1,069.20 an ounce. March silver was down 46.4 cents, or 3.2%, to $13.915.
“There’s two main points to make mention of today,” said Dave Meger, metals analyst with Vision Financial Markets. “No. 1, we saw some weakness overnight in Asian equities on some ongoing concerns about Chinese capital flows. That weakness is leaking into our markets. Maybe the idea of a little lesser Chinese demand going forward has the market under some light pressure.”
Additionally, Meger cited spillover weakness from the tumble in crude oil prices on a day when there was limited movement in the U.S. dollar. Nymex February crude oil was down $1.37, or 3.6%, to $36.73 a barrel.
“That is weighing on the commodity complex overall,” Meger said.
However, Meger cautioned against reading too much into any of the movement in the metals, pointing out that volume was exceptionally thin at the start of a trading week between Christmas and New Year’s Day. Some markets, including London, remain shuttered.
In fact, February gold held within an unusually narrow range of $8.2 an ounce for the overnight session and New York hours combined – spending the bulk of the New York portion of the day in a band of less than half of that.
February gold held at major support that iiTrader put at the $1,068.20 level, which held last week and was tested again. The contract bottomed a dime above this.
“There is no major data today and traders will look to Case Shiller (data on home sales) and consumer confidence tomorrow,” iiTrader said. “However, the metal may find it difficult to get much going in the last week of the year; it has been a non-performing asset once again, which means it has been facing tax selling for much of the last week and buyers would wait until the start of New Year before allocating.
“A close below $1,063.10-1,064.10 will likely encourage further selling. The line in the sand to the upside remains at $1,086.30-1,088.30 and a close above here will spark a short-covering rally; we are looking for such a move next week.”
Tuesday’s U.S. data include the Case-Shiller report on home prices at 9 a.m. and consumer confidence at 10 a.m.
Source: KitcoNews
