Gold Hit by Profit-Taking on COMEX; Silver Rises
Source: Platts, Anthony Poole (7/24/09)
". . .the long-term players are staying with gold."
The active August contract was down $1.80 at $953/oz at 11:17 am EDT on the active electronic, Globex platform. It began the session last night at $948 and saw an overnight-low of $946.60 and a high, so far of $954.40.
While the euro was initially higher against the dollar, it retreated after meeting with its own round of profit-taking.
"Gold has made some serious gains this week, when you think that it settled last Friday at $937.50 for August and now we're up well above $950," said a trader.
Traders noted that gold has met resistance at around the $955/oz level at various points this week, although earlier in the week, analysts were pegging resistance at $955.
"I think what we're seeing today is some of the short-term investors realizing their gains," the trader added. "These include people that got in at the end of last week, or the beginning of this week, and people who got in a couple of weeks ago at closer to $900. The long-term players are sitting tight and rolling positions forward. They weren't the ones spooked by the comments from the Fed earlier this week that inflation wouldn't be an issue in the recovery."
An analyst agreed. "I think anyone who thinks that the U.S. can keep interest rates at historical lows for any length of time and keep monetary policy relaxed without stoking up inflation somewhere down the line is extremely naive. That's why the long-term players are staying with gold."
In contrast, silver was moving in the opposite direction to gold and traders attributed this to news that ETFS Silver Trust, the US subsidiary of London-based ETF Securities, has issued shares, backed by silver bullion, to trade on the New York Stock Exchange.
On Globex, the active September contract was up 6.50 cents to $13.835/oz at 11:30 am EDT.