Gold Snaps Seven Day Winning Streak Gold prices nudged lower overnight, ending a seven-day winning streak, as investors reacted to reports of a €50 billion-a-month ($A71.4bn) bond-buying proposal by the European Central Bank. Gold for February delivery, the most actively traded contract, eased US50c to settle at $US1,293.70 a troy ounce on the Comex division of the New York Mercantile Exchange. It had climbed 7.1 per cent over the previous seven sessions. Gold prices had initially surged above $US1,300 a troy ounce for the first time in five months as investors stocked up on the haven asset ahead of the ECB’s policy meeting Thursday. However, prices of the precious metal pulled lower after The Wall Street Journal reported that the central bank would vote on a proposal to buy bonds each month for at least a year. The policy measure would aim to boost Europe’s economic health and stave off the risk of deflation. A better sense of the ECB’s likely policy course, as well as gold’s $US100 gain so far in 2015, prompted some investors to trim their gold holdings, according to Frank Lesh, a broker and futures analyst with FuturePath Trading in Chicago. “Gold has had a wonderful run up, and all we’re seeing at the moment is some guys take money off the table,” Mr Lesh said. Still, the decline in gold prices was muted as investors were wary of getting ahead of the ECB. Europe’s central bank has a history of jawboning the market without following through with actual policy changes, according to Adam Klopfenstein, a senior market strategist with Archer Financial Services in Chicago. “They’ve let us down at every turn,” he said, adding that some investors will hold on to their gold positions until the ECB delivers its decision on Thursday. By contrast, silver futures held on to some of their gains after breaching bull-market territory, defined as a roughly 20 per cent rally from a previous low, earlier in the day. Silver for March delivery rose US23.7c, or 1.3 per cent, to $US18.193 a troy ounce, its highest settlement since September 18 on the Comex. Futures must settle above $US18.496 an ounce to cement silver’s bull market status.
Posted on: Wed, 21 Jan 2015 22:49:28 +0000
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