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Comex Gold Remains In Recent Ranges; Euro-Related Selling Offset By Bargain Hunting 24 July 2012, 2:14 p.m. By Allen Sykora Of Kitco News http://www.kitco.com/
Editor's note: Catch the Latest Happenings with Kitco Video News! (Kitco News) - Gold futures recovered from early weakness that was tied to a softer euro before bargain hunting enabled the yellow metal to stabilize, finishing Tuesday’s open-outcry session with little change, analysts and traders said. They described a technical-chart pattern in which gold is forming an increasingly tight “wedge” consolidation-type formation that is often a harbinger of a sharp break either way. Following the pit close, gold for August delivery settled $1.20 lower at $1,576.20 per ounce on the Comex division of the New York Mercantile Exchange. September silver was down 23.1 cents to $26.811 an ounce. The day began the way Monday did--with worries about eurozone debt issues translating into a softer euro, in turn hurting gold. The market was reacting to a Moody’s Investors Services downgrade of the outlook for some of the more financially sound European nations, including Germany, the Netherlands and Luxembourg, since it appears they will be called upon to aid the more heavily indebted nations. All of this comes after Greece’s prime minister said over the weekend that is country’s economy is a depression and Spain’s 10-year bond yields have climbed above 7.5% due to worries about the country’s debt. The euro fell as far as $1.2043, its weakest level in two years. “With the euro down to new lows, that was pressuring gold early in the day,” said Dave Meger, director of metals trading with Vision Financial Markets. “The rebound came with a slight rebound in the euro. And we still do see adequate demand or buying into these (price) dips.” Bargain hunting in has emerged lately on pullbacks to the $1,570-$1,560 area, he continued. The gold market has been largely range-bound since May, caught between selling tied to the softening euro but drawing support from bargain-hunting, he continued. “Today was a bit of a microcosm of what we’ve seen over the last several weeks.” Spencer Patton, chief investment officer with the hedge fund Steel Vine Investments, said gold also seems to be tracking equities lately. The metal has tended to move with equities since on stock-market sell-offs, fund managers and other investors often have to sell gold to cover losses elsewhere, he said. “This market (gold) has been exceedingly calm over the last 10 days,” Patton said. “We have not seen very much volatility…Prices are in an increasingly narrow range, setting higher lows and lower highs. I do expect that sometime over the next two weeks, we’re going to get a breakout to one side or the other on gold.” Technically, Meger put chart support for August gold in the area around $1,560 to $1,570. Meanwhile,  $1,600 has emerged as nearby resistance, he said. He put near-term chart support for September silver around $26.50, with resistance around $27.50 to $28. By Allen Sykora of Kitco News; asykora@kitco.com