(Kitco News) -- U.S. precious metals futures registered multi-month lows Thursday, pressured by declining interest from speculators who have increasingly chosen to cash out their gold/silver investments or place reserves in more traditional sectors, such as a strengthening U.S. equities market.
Comex February gold futures declined for a ninth straight session Thursday, briefly dipping to levels last seen in July, prior to closing with losses of $21.50 at $1542.60 per ounce. March Comex silver hit a 3-month low early in the session, but eventually closed near the highs with net gains of 15.6 cents at $27.39 per ounce.
Spot gold futures have plunged nearly 4% during the past two trading sessions, accelerating a steady 6-week decline.
"We are in the funny week for gold…this week always brings out odd behavior and gold is usually the star of the show," said Country Hedging analyst Sterling Smith.
Some noted investors, such as leading hedge fund managers and billionaire George Soros, are reported to have been actively selling off their gold holdings recently, and the U.S. Mint’s sales of American Eagle gold bullion coins also dropped to a nearly 3 1/2 year low in November, reflective of slumping physical demand. The Mint also announced Thursday that with sufficient gold and silver on hand to meet anticipated coin demand, it will not allocate sales to dealers in early 2012, as has been the case for several years, due to unprecedented demand and a lack of bullion supply.
Dennis Gartman, economist and author of the Suffolk, Virginia-based Gartman Letter, warned that the on-going selloff in gold futures has likely not yet reached an end.
"We fear...that there is still a great deal more liquidation to be effected, and that worse lies yet ahead," he said Thursday. "It does indeed seem reasonable that there is enough impetus to drive the spot price of gold to -- and perhaps even below -- $1500/oz before the late longs are taken out, and the hedge funds are liquidated."
The U.S. dollar weakened slightly Thursday, adding 1 cent per ounce to gains in spot silver, while cutting declines in spot gold by 60 cents, according to the widely-watched Kitco Gold Index.
Weakness in the value of the dollar index Thursday may have been drawn from news that initial claims for state unemployment benefits increased by 15,000, to a seasonally adjusted 381,000 persons last week, surpassing expectations.
London gold was last fixed at $1531 Thursday, down $40 from the LBMA's PM fix of Wednesday.
Technically, February gold futures prices ended near the mid-range of Thursday's $39.90 trading range, penetrating initial and secondary chart resistance at the $1543.30 and $1550 levels. March silver futures traded in a huge $1.33 range on the session, and successfully closed above intitial resistance at the $27.16 per ounce level.
January Nymex copper last traded up 0.8 cent to $3.3695 Tuesday. Februray crude oil futures last traded with gains of 18 cents to $99.54 per barrel, despite the release of recent government and industry reports which showed that crude oil and gasoline inventories are, surprisingly, each rising.
Much of the support for crude markets was attributed to Iranian threats to shut down shipping through the strategically important Strait of Hormuz, if Western nations impose additional sanctions on that nation in response to Iran's alleged attempts to develop a nuclear weapons arsenal.
Much of the support for crude markets was attributed to Iranian threats to shut down shipping through the strategically important Strait of Hormuz, if Western nations impose additional sanctions on that nation in response to Iran's alleged attempts to develop a nuclear weapons arsenal.
Source; http://www.kitco.com/reports/KitcoNews20111229_pm.html
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