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Gold slides to weakest level since March 2010
Published in Amwal Al Ghad on 23 - 07 - 2015

Gold fell more than 1 percent to a five-year low on Wednesday as a bounce in the dollar fueled downside momentum, with investors continuing to pull away from the metal after its dramatic slide earlier this week.
A looming rise in US interest rates, the first in nearly a decade, has dented gold's investment appeal, encouraging more sellers in the market after Monday's 3 percent rout, its biggest one-day drop since September 2013.
Holdings in the world's biggest gold-backed exchange-traded fund, SPDR Gold Shares GLD, fell for a fourth day on Tuesday by another 4.8 tons, hitting their lowest since 2008. Its reserves have nearly halved from their 2012 peak.
Spot gold was down 1 percent at $1,090.70 an ounce at 1400 GMT, while US gold futures for August delivery were down $14.50 an ounce at $1,089.00. Earlier, spot prices touched their lowest since March 2010 at $1,087.04 an ounce.
Gold's decline on Wednesday picked up momentum after the dollar moved into positive territory against a basket of currencies.
"We have a lot of pockets of weakness currently in the gold market, and that is what is feeding the bearish sentiment we see," Julius Baer analyst Carsten Menke said.
"The money managers are net short and that is relatively rare," he said.
"The risk is increasing that you see more capitulation from holders of physically backed products. With prices below $1,100, more investors could get cold feet. Another washout from these products would certainly be a major negative."
Monday's selloff came on the back of huge volumes traded on the Shanghai Gold Exchange after investors dumped more than $500 million of bullion in New York in four seconds during early Asian trading hours.
That sparked a slide through key chart levels, triggering stop-loss orders that added to momentum. From a technical perspective, gold remains under pressure.
"Our next price target is seen at $1,044, the 2010 low, followed by $1,006, the late 2009 high," technical analysts at ScotiaMocatta said in a note.
"Lower lows and lower highs keep this bearish price move in motion. Only a close back above $1,133 will stabilize the metal."
Physical demand has been sluggish despite this week's steep price drop. India is not rushing to pick up slack Chinese demand as would-be buyers wait for further price drops, with a wedding season lull and poor rains curbing appetite.
Spot platinum was down 1.1 percent at $966.74 an ounce, while palladium was down 1.7 percent at $615, both trading near multi-year lows. Silver was down 1 percent at $14.68 an ounce.
Source: Arab News


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