Selling Pressure
With stops being triggered overnight at the psychological figure of $1,300, gold led the precious metals complex lower. After failing ahead of key resistance at the end of July around $1,350 (the 23.6% Fibonacci retracement level of the all time high made in Sep 2011 of $1,920 to the low of $1,180 made at the end of June 2013), gold has steadily moved lower over the past two weeks. Gold ETFs continue to shed ounces which are weighing on the yellow metal.
The US trade deficit narrowed more than expected, by nearly $1 billion in the month of June, to the lowest level since October 2009. Crude oil imports declined while exports of manufactured goods increased for US companies. While gold normally doesn’t react much to trade deficit news, it seemed to cause further selling pressure this morning.
The London PM gold fix came in cheap (by almost $1 vs. the arbitrage of December Comex gold) and basically put in the low of today’s trading session. There were Asian physical demand bids waiting in the low $1,280s and the market has held steady ahead of this area for the time being. With liquidation being the theme of today for equities, commodities, and the USD though, gold may find it hard pressed to make a significant recovery.
