Gold prices fell to seven-week lows Tuesday as the U.S. dollar
continued to recover from the lows seen last month, lessening the
need for alternative assets.
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"The dollar is firming, along with the stock market, while the
bond market has been selling off in the past few days, suggesting
confidence is returning and money is flowing back into equities
and out of safe-haven assets like U.S. treasuries and gold," said
Scott Mehlman, chief bullion dealer with Credit Lyonnais Rouse inNew York.
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In the past two months gold prices have recovered from a 19-year
low around $270.75 an ounce, but producer hedging and fears of
deflation have seen the rally fizzle out, leaving funds to
liquidate net long positions again.
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Heavy buying of December $290 gold put options and delta hedging
of the options by the grantors helped to push COMEX gold futures
down below last week's low Monday, triggering stop loss orders by
funds, traders said.
But in the longer term the trends that have pushed gold prices
lower in the past year are poised to reverse themselves, according
to industry consultants CPM Group in New York.
Did they say 19 year low?
hmmm?
Don Green (The Doom Slayer). |
