Gold Falls on Profit Taking

Gold fell in New York on speculation its advance to a two-month high will spur some investors to sell. Platinum declined as South African miners returned to work following a five-month pay strike.

Gold futures’ 14-day relative-strength index since June 19 has been above or near the level of 70 that suggests to some traders who study technical charts that prices may retreat. It was at 66.4 today. The metal rose 3.3 percent last week as the Federal Reserve said it will keep interest rates at almost zero for a considerable time, even as it cut bond purchases.

Bullion is set for the first back-to-back quarterly gain since 2011, partly as violence in Iraq and tension in Ukraine spurred demand for a haven. Insurgents are firming their hold on parts of Iraq, U.S. officials said. A small contingent of U.S. forces has arrived in Iraq to gather intelligence for possible U.S. airstrikes and establish an operations center in Baghdad.

“The correction from the highs has continued with some good selling seen in Asia,” David Govett, the head of precious metals at Marex Spectron Group in London, wrote today in a report. “We have probably seen the highs for the time being, in the absence of any fresh geopolitical problems.”

Gold for August delivery fell 0.6 percent to $1,313.70 an ounce by 7:26 a.m. on the Comex in New York. It reached $1,326.60 yesterday, the highest since April 15. Bullion for immediate delivery lost 0.4 percent to $1,313.14 in London, according to Bloomberg generic pricing.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza