Gold futures, coming off five straight days of setting record-high prices, slipped Tuesday morning and some analysts attribute the fall to the precious metal's rally being overdone, Bloomberg reports.
Last Tuesday, gold futures set record highs of $1,456.40 per troy ounce, which were broken Wednesday when the precious metal's value was $1,463.70 per troy ounce. On Thursday, the precious metal was worth more than $1,464.50 per troy ounce. On Friday, gold futures notched $1,476.20 per troy ounce, which stood over the weekend then was broken on Monday.
"The rally of gold prices has a shaky footing as there have still hardly been any inflows into exchange-traded funds and correction potential is building up," according to a note from Eugen Weinberg, head of commodity research at Commerzbank. "A broader correction of commodity prices seems to be needed."
Shortly after 8 a.m. on Tuesday, gold futures were down 0.37 percent, a $3.55 reduction to $1,462.60 per troy ounce. The precious metal's record price is $1,478.18, which was set on Monday.
"Sentiment in gold and silver markets will likely be bearish," Ong Yi Ling, Singapore-based analyst with Phillip Futures, told the news service. "Investors may be eager to lock in profits after the recent rally, fearing the exit of large commodity players from the market."
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.