Gold Investing Prices Edge Lower On Stronger U.S. Dollar
Posted by Brian Ford on May 10, 2013
Gold investment prices started to fall as soon as the opening bell sounded to begin Friday’s trading session and the price decrease continued until the gold spot price fell as low as $1418 before rebounding to the $1425-$1430 range. The initial analysis was that a stronger U.S. dollar forced prices down at the start of the day, the drop below the technical support level of $1440 caused a selling frenzy and then hesitance on the part of buyers to take advantage of low prices kept gold from recovering and moving above $1430.
Of the $32.50 per ounce that gold had lost as of noon EST on Friday, $12.50 was attributed to strengthening of U.S. currency while the other $20 in losses was largely blamed on technical selling and a lack of new buyers. According to Certified Gold Exchange analyst Steven Patel, the difference between today’s losses and other high-fluctuation days that have taken place in 2013 was the sellers. “Since mid-February it has been the derivatives investors who have been largely responsible for large loss days,” Patel said. “Today, however, there was substantial physical selling once investors saw the Dollar’s jump, and once the support line was crossed that selling intensified for another hour or so.”
Selling died down in early afternoon trading and in a survey of seven CGE analysts, five said that gold should finish next week at a higher level than this Friday, one said that gold would be in the $1425-$1430 range next Friday and one felt that gold could fall as far as $1395 per ounce next week. In last week’s survey of twelve analysts, seven individuals correctly predicted gold would end this week (ending May 10) above $1410 yet below $1430 per ounce. Bookmark our Daily Updates page for more gold market news next week.