COMEX gold falls early, bear market may be forming Updated Fri 7/26/2002 09:51 EST
NEW YORK, July 26 (Reuters) - COMEX gold futures continued to ratchet down to new medium-term lows Friday morning as some players not only liquidated long positions, but began taking out new short positions after technical support gave way, COMEX brokers said. With the dollar reasserting its strength and U.S. equity markets opening higher, some traders said there was talk that some funds were changing their strategy, betting that the bottom was in for stocks and that gold had already seen its best levels. Gold selling was seen overnight, with one analyst reporting that some recent gold purchases in the Asian markets were sold off and undermined sentiment in Europe and New York. "Gold is in a fast market right now. There is a lot of liquidation. The dollar is stronger, stocks are higher. I think some people think we might have seen the bottom of the stock market," said one gold trader. Benchmark August gold futures <0#GC:> at the New York Mercantile Exchange slipped $4.90 to $304.80 an ounce. The session range was $304.20 to $310.60. Spot gold <XAU=>> was changing hands at $304.90/305.40, down from $309.60/0.10 late Thursday. The afternoon gold fix in London was $309.45. COMEX estimated Friday's 1000 EDT gold volume at 20,000. Some large funds were reported to be heavy gold sellers Friday, prompting some players to speculate that a strategic shift may be underway. But other traders said they were still trying to sort out what was happening as the downside was quickly giving way. A technical break below the medium-term low hit earlier in the week accelerated the selling as a series of stop-loss sell orders were triggered beneath $307 on COMEX August gold. On Wednesday, August gold tumbled to a nadir of $306.70 an ounce, its lowest level since April 26. On Friday, it slid further on long liquidation, hitting a low that dates back to April 23. "The market broke down at a technical point around $305, but it started around $307 So, right now it's just technical selling," said one trader. One gold trader said he thinks August gold will return to $298 an ounce in about a week's time. Losses in silver mirrored those in gold, traders said. COMEX September silver futures <0#SI:> plummeted 12 cents to $4.735 an ounce, trading $4.70 to $4.86. Spot silver <XAG=> was quoted at $4.72/74, a sharp drop below Wednesday's close at $4.84/86. The London fix was $4.825 an ounce. NYMEX October platinum <0#PL:> rose $7.20 to $525 an ounce. Spot platinum <XPT=> was quoted at $520.80/528.80 an ounce. September palladium futures <0#PA:> gained $1.40 to $333 an ounce. Spot palladium <XPD=> traded at $327.6/339.60 an ounce. ((Carole Vaporean, New York Commodity Desk, 646-223-6044, fax 646-223-6049, nyc.commods.newsroom@reuters.com)) (C) Reuters 2002. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world. nN26387132 GOL/X GOL |
