Gold fell to the lowest in more than a month on speculation that physical demand will slow during this week’s Lunar New Year holiday in Asia.
The absence of the Chinese market this week means demand from other regions has a larger gap to plug, thus exposing prices to a “fragile floor,” Suki Cooper, an analyst at Barclays Plc in New York, wrote today in a report. Prices also fell as ministers from the 17-member euro area met in Brussels today to discuss a possible bailout for Cyprus as a tightening election contest in Italy and a political scandal in Spain threaten to reignite the region’s debt crisis.
“Lack of physical demand, coupled with worries about Europe, pushed the market lower,” David Meger, the director of metals trading at Vision Financial Markets in Chicago, said in a telephone interview.
Gold futures for April delivery retreated 1.1 percent to settle at $1,649.10 an ounce at 1:41 p.m. on the Comex in New York, extending this year’s drop to 1.6 percent. Prices earlier touched $1,644.10, the lowest for a most-active contract since Jan. 7. Trading volume was about 20 percent higher than the average in the past 100 days.
The metal fell below the 200-day moving average near $1,665.36, a bearish signal to some analysts who study historical price patterns.
“Today’s fall was exaggerated by the technical weakness,” Meger said.
Silver futures for March delivery retreated 1.7 percent to $30.91 an ounce in New York, the biggest drop in more than a week.
On the New York Mercantile Exchange, platinum futures for April delivery fell 1.1 percent to $1,696.10 an ounce, the third straight loss.
Palladium futures for March delivery jumped 0.9 percent to $758.60 an ounce on the Nymex.
To contact the reporters on this story: Debarati Roy in New York at email@example.com; Nicholas Larkin in London at firstname.lastname@example.org
To contact the editor responsible for this story: Steve Stroth at email@example.com