Gold futures slip but sentiment for rebound prevails in some corners

Gold futures dropped to their lowest value since August of last year as market confidence was shaky following the sale by a prominent bullion bull, according to The Wall Street Journal.

Billionaire George Soros unloaded his gold possessions by well more than 50 percent, prompting concerns among some investors. Soros’ sale of the yellowish metal during the final quarter of last year is reminiscent of similar action in early 2011, when he reduced his holdings and kept a low stake for the first three quarters of the year.

But one industry insider is convinced that the less-than-bright outlook for the yellowish metal will soon subside. Senior broker Kurt Pfafflin with Daniel’s Trading said he anticipates “the current extreme negative sentiment to evaporate.”

“The negative sentiment that has dominated for the past two months has now reached extreme levels and it appears to be gnawing away at even the most ardent supporters of the heavy metals, hard currencies,” the senior broker said on Thursday. “So, where exactly has the love for gold and silver gone?  And if the Thrill is Gone, is it really gone for good?  Well, I don’t believe it is and I can’t say exactly when the tide will turn for sure.”

At 12:19 p.m. on Friday, gold futures fell 1.6 percent, a $27.55 loss to $1,608.75 per troy ounce. At 12:20 p.m., silver futures dropped 1.48 percent, a 48-cent slide to $29.95 per troy ounce.

Paulson persists
While Soros’ interest in the yellowish metal waned, that of another high-flying investor did not.

The Wall Street Journal reports John Paulson sustained his $3.5 billion interest in the precious metal, which is called Paulson & Co. The stake consists of 21.8 million shares.

Paulson has long been one of the strongest adherents to the belief that gold’s best days are ahead, akin to the sentiment of the senior broker with Daniel’s Trading.

The yellowish metal also reacted to the commentary of another high-profile financial luminary, Bloomberg reports.

Bernanke blurb
The economy of the U.S., the world’s largest and that which is spearheading the global recovery from the Great Recession, is on the mend, according to chairman Ben Bernanke with the U.S. Federal Reserve.

While in attendance at the Group of 20 summit in Moscow, the Fed chief said development and growth of note in the U.S. has the potential to benefit the global economy.

And that sentiment is echoed by a high-level strategist.

“The economy is doing better and equities are winning, so people don’t want gold,” chief investment strategist Michael Gayed with Pension Partners LLC in New York told the news source on Friday. “No one wants to invest in safe-haven assets.”

But the senior trader with Daniel’s Trading remains unswayed in his endorsement of the precious metal.

In fact, he advises monitoring those equity markets for the sake of gauging their consistency.

“Let’s keep our eyes on what transpires if/when the high-flying equity markets run into a bit of turbulence,” Pfafflin said. “Will there be a reversal of said money flow back into gold and silver?”

Two-percent nose dive
Reuters reports gold futures lost 2 percent of their value on Friday, linking some of those losses to inactivity from a key market.

China, a top consumer of the yellowish metal along with India, this week has been observing the Lunar New Year so markets have been closed.

The yellowish metal is barreling toward losses of roughly 3 percent this week, which could represent an opportunity to cash in.

“With prices coming lower, all the physical buyers will start covering some of the shorts and maybe some investors will come around as well,” precious metal trading head Adrien Biondi with Commerzbank told Reuters.