Gold Puts Up a Fight as Selloff Slows Near Key $1,200 Level
Dollar hurts gold’s appeal but Turkey crisis may give support.
(Bloomberg) -- Gold is showing resistance near $1,200 an ounce, suggesting prices are for now finding a floor near a one-year low.
Since last week, the metal’s declines have stalled as it gets closer to the price often touted as a key psychological level, trading no lower than $1,204.58. While a stronger dollar and U.S. economic growth are hurting bullion’s appeal, concerns that Turkey’s financial crisis could spread may be preventing a further selloff.
“We are seeing the metal put up a fight against the stronger dollar, with the contagion risk attracting some demand,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by email.
There are other signs investors are losing faith. Holdings in exchange-traded funds are at a six-month low and money managers have never been so bearish.
Gold for immediate delivery slipped 0.1 percent to $1,211.24 an ounce at 3:27 p.m. in New York, on course for a fifth straight weekly loss. On Comex in New York, futures for December delivery settled 0.1 percent lower.
While the trend remains bearish, there’s a possibility of a technical rebound to $1,230 or $1,235 in the coming weeks, according to Carlo Alberto De Casa, chief analyst at brokerage ActivTrades.
“It’s probably still too early to pop the champagne as the gold bears are still in control and have yet to be challenged,” Hansen said.
In other precious metals, silver and platinum fell in the spot market while palladium gained.
--With assistance from Luzi Ann Javier.
To contact the reporter on this story: Rupert Rowling in London at rrowling@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, ;James Attwood at jattwood3@bloomberg.net, Nicholas Larkin, Steven Frank
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