Gold Clings to $1300 on Technical Selling Posted by Brian Ford on November 05, 2013
The gold spot price is close to falling through the $1300 floor due to some technical selling. The selling taking place this week appears to be evenly split between derivatives investments, gold bullion investments and certified gold coin investments, but the three segments of the gold market are experiencing sell-offs for different reasons.
Gold derivatives, such as ETFs, saw more shedding in October than in August and September combined as investors leery of government intervention into paper-based markets withdrew funds. Although GLD executives and members of the World Gold Council have downplayed the selling, GLD and other ETFs are at or near their lowest levels in years.
Gold bullion owners haven’t been doing as much selling as they have trading, according to reports from many U.S. gold bullion dealers. Gold and silver have been rather stagnant for much of 2013 but the growing rumblings of a bullish silver cycle that could significantly shrink the gold/silver ratio has motivated some investors to shift their focus from gold to silver.
The certified gold coin market has been somewhat tumultuous since gold’s initial large drop in April. Bargain-hunting has been the norm for the last couple of months but with gold above $1300 and the certified gold coin market trend now in line with bullion, some coin dealers are experiencing an overwhelming number of clients who want to sell their PCGS and NGC gold coins. This has forced prices of some coins lower, though analysts believe that prices should rebound in the coming weeks if the heavy selling slows and if gold can maintain an above-$1300 spot price.
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