Gold Breaks The $1,400

gold-correction

Gold prices fell beneath $1,400, forced lower by a stronger USD and concerns about physical demand for the yellow metal.

July gold delivery, the most active contract, on the Comex division of the New York Mercantile Exchange was recently trading down $29.80 (2.1%) at $1,394.70 an ounce. On its way to end at its lowest price since April 18.

Thomas Capalboa precious metals broker with Newedge stated that as gold prices fell under $1,410 an ounce, a run of automatic selling orders started, bringing in a sharper slip.

Fast strengthening of USD helped put gold under the psychologically important $1,400 level. When the greenback assemblies, gold becomes more expensive for foreign buyers and they be likely to leave the market.

The ICE Dollar Index was recently increase by 0.4% at 83.904, and is increased by 2.7% so far this month from 81.715.

Gold sales by gold-backed ETFs as well pushed some investors to exit the market. Analysts at Commerzbank CBK.XE +11.87% said that the movement of bullion from these funds, which trade and store gold representing investors, has been a stable negative effect on the market for most of 2013. They added also that gold sales by ETFs have totaled 230 tons since early April and 412 tons since the beginning of the year.

Some investors have similarly been leaving gold by the record-breaking in the U.S. stock market. The S&P 500 stock index has set additional settlement highs eight times so far this month, encouraging some investors to sell gold in attraction of equities.