Gold futures extend decline to trade below $827
By Polya Lesova, MarketWatch, Last Update: 11:12 AM ET Aug 12, 2008
NEW YORK (MarketWatch) -- Gold futures traded marginally lower Tuesday, after tumbling more than 4% in the previous session to close at their lowest level of the year.
Gold for December delivery fell $1.80 to $826.50 an ounce on the New York Mercantile Exchange.
"The metal was the subject of long liquidation by funds and did not fully meet the anticipated bargain-hunting demand from India," said Jon Nadler, senior analyst at Kitco Bullion Dealers.
"Although buying interest has picked up nicely in advance of wedding season, some local buyers are now betting that they might be able to pick up even cheaper gold if they wait some more," Nadler said.
On Monday, gold dropped $36.50, or 4.2%, to close at $828.30 an ounce. The contract fell to a low of $824.50 an ounce in Globex electronic trading -- gold futures' lowest price since late December.
"Gold's failure to hold above $850 and the lack of bullish reaction by traditional safe-haven assets such as gold and oil to the clash between Russian and Georgian forces suggest the need for cash to cover losses in other sectors will continue to outweigh geopolitical tensions in the short term," wrote James Moore, an analyst at TheBullionDesk.com.
Moore, in a research note, also said he anticipates market sentiment toward gold to remain bearish.
Russian President Dmitry Medvedev has ordered an end to military operations in Georgia, claiming his country's actions have restored security for civilians and peacekeepers in the disputed region of South Ossetia. See full story.
In foreign-exchange trading, the dollar declined Tuesday, pulling back after a week of rapid gains against the euro and other currencies
The SPDR Gold Trust (GLD) fell 0.4% to $80.79, while the iShares Silver Trust ETF (SLV) rose 1.1% to $14.56 and the Market Vectors-Gold Miners ETF (GDX) rallied 2% to $35.08.
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