Gold Price Heading for Fourth Monthly Drop as Bears Take Command

July 31, 2018

London (July 31)  Gold is heading for a fourth monthly decline, the longest streak since 2013, as investors favor the dollar and pessimism on the metal grows.

Bullion for immediate delivery was down 0.2 percent at $1,219.25 an ounce at 10:16 a.m. in London. Prices are down 2.7 percent this month and near a one-year low.

The precious metal has fallen out of favor after Federal Reserve policy makers boosted interest rates twice this year. The Fed is expected to affirm plans for two more hikes at a meeting this week.

With holdings in exchange-traded funds shrinking, funds have been building up their bets on further declines in prices. As of last week, money managers held the biggest net-short position in futures and options in records going back to 2006, according to CFTC data compiled by Bloomberg.

Related column: Hedge Funds’ Big Short Could Be Fool’s Gold: David Fickling

“Gold is continuing its bearish movement and is laying the foundation for another negative week,” said Carlo Alberto De Casa, chief analyst at ActivTrades in London. “Despite the recovery of the euro against the U.S. dollar, little seems to have changed and investors still prefer other assets over bullion.”

Earlier Tuesday, the Bank of Japan left its key interest rates unchanged and traders’ attention is now switching to monetary policy decisions from the Federal Reserve and Bank of England later this week.

“Gold has been on a downward path since the last few weeks owing to a firmer U.S. dollar, ETF outflows and weaker consumer demand,” said Madhavi Mehta, an analyst at Kotak Commodity Services Pvt in Mumbai.

Other precious metals:

Silver down 0.4 percent today to $15.4204 an ounce. Prices are set for a 4.3 percent decline this month, the most since February.

Palladium slipped 0.2 percent to $927.63 an ounce and platinum lost 0.3 percent to $825.89 an ounce today.


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