Gold futures fell sharply Thursday to settle at $1,206.70 per ounce on the Comex in New York, reflecting a general flight to the perceived safety of the dollar and dollar assets. Investors appeared to favor Treasury notes and safe bonds, registering their fear that deflation is a greater threat than inflation.
The Spanish Treasury sold $4.28 billion of five-year government bonds, defying warnings by Moody’s Investors Service that the rating agency might cut Spain’s AAA sovereign debt rating. The yield on the five-year debt rose 12.5 basis points to 3.657 percent.
Stock indexes and futures also had a depressing day, but gold failed to pull in the opposite direction, as it has done in many sessions this year. Sovereign debt didn’t appear to worry investors as much as weak growth in China and increasing jobless claims in the U.S.
Another factor in the dropping price of gold was the International Monetary Fund’s sale of 15.2 metric tons of gold last month, after selling 14.4 tons in April and 18.5 in March.
Silver futures also fell 4.9 percent to settle at $17.79 per ounce.
Learn Futures Technical Analysis with The Market's Spine
Give Your Trading the Backbone it Needs to Succeed, The Market’s Spine is a 34-page futures technical analysis guide that details how to read the backbone of recent market activity, explains a handful of indicators that are well known to institutional and fund traders, and more. Expand your futures technical analysis knowledge here.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.