Nov 8th, Gold Commentary
Gold Watch: A big day for Democrats
By Jon Nones
08 Nov 2006 at 02:56 PM
Gold for December delivery was last down $3.70 at $624 an ounce on Nymex.
Traders mulled mid-term election results - a resounding victory for the Democratic Party - by locking in some of the metal's recent gains, according to CBS MarketWatch.
"In the run-up to the U.S. election the markets did not know what to do nor how to respond, and now in the run-down from the U.S. election, the markets are still confused," said Dennis Gartman, editor of The Gartman Letter. "Gold bugs want to try to push gold higher, and the trend obviously remains upward."
"After the dust settles from the U.S. elections, the world will awake to see the U.S. more divided then ever before," said Peter Grandich, editor of the Grandich Letter. "Radicals around the world will take heart and the world will be as dangerous as ever before," he said, adding that "gold can only benefit in the long run."
Comex gold has been softer in early trading largely on profit-taking, analysts told Dow Jones Newswires.
“I think it's just a bout of profit-taking,” said Jim Steel, analyst with HSBC. “The market doesn't seem to be particularly disturbed by anything.”
With gold “not responding in a real strong fashion on the upside, you've seen some profit-taking and liquidation pressure,” said Stephen Platt, analyst with Archer Financial Services Platt.
Gold prices fell in New York as some investors bet a four-week rally was overdone, according to Bloomberg.
“We're seeing people getting out of length instead of real sellers,” said Michael Guido, director of hedge-fund marketing at Societe Generale. “We've had a $56 rally so we're seeing some technical profit-taking in gold.”
“Gold had a big move last week,” said John Reade, an analyst at UBS AG. “The key thing is if it does continue to slip lower whether we see physical demand below $620. If we don't, then prices are going even lower.”
“Speculators had positioned themselves for a weaker dollar and stronger gold,” said Carlos Perez-Santalla, gold trader and president of Hudson River Futures in New York. “People are bailing out of the longs after the market didn't rally after the Democrats won.”
According to Reuters, investors speculated on policy shift after the Democrats took control of the U.S. House of Representatives.
"Gold is meeting resistance ahead of the $630 level and looking for direction from the dollar and oil. At the moment, we are just consolidating and waiting for the next push higher," said James Moore, precious metals analyst at TheBullionDesk.com.
"We are still on track for further gains and I think we will close the year much closer to $700 than $600," he added.
December silver futures fell 3.5 cents to $12.64 an ounce, January platinum fell $29.80, or 1.9%, to $1,162.50 an ounce and December palladium dipped $5.30 to $329 an ounce. December copper fell 6.85 cents to $3.297 a pound.
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