Futures Prices Drop At Gold Exchanges Posted by James Randolph on March 08, 2010
March 8, 2010 – Gold exchanges experienced their largest drop in futures prices in a month as Greece’s austerity measures and a pledge from French President Nicolas Sarkozy pushed the cost of the metal lower. April futures dropped $13.70 to $1,121.50 at noon EST today; gold prices rose 1.5 percent last week on strong demand.
Greece has announced nearly $6.5 billion of cost-cutting measures and an additional $6.8 billion in long-term bonds in an attempt to begin cutting nearly 4 percent from its 12.7 percent deficit. The government is also looking to win favor with other EU members and avoid credit devaluation by Moody’s and Standard and Poor’s with these actions.
“If the Greek situation calms down, people may not be as interested in owning hard assets,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. As Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago said, “Gold is just listless; it’s running into some resistance.”
Some technical buyers also sold today as prices failed to get over $1,140 at gold exchanges, suggesting strong resistance at that level. “Without forward momentum, people are very quick to jump ship,” Matt Zeman said.
While gold exchanges are seeing some people jumping out, many experts are suggesting that people jump into positions. Dennis Gartman, an economist and editor of the Gartman Letter is recommending clients to start buying gold in US dollars. With solid fundamentals, strong demand and a temporary dip in prices, there is potential profit after the current price reductions subside.
Senior Staff Writer – Certified Gold Exchange