Morning Gold: Gold Lost Near 30% This Year


(Kitco News) – In early U.S. trading Friday, gold prices are slightly lower after hitting a new nearly 3-year low of $1,179.40 in the August Comex futures overnight. Spot gold was last quoted up $1.40 at $1,203.25. August gold was last down $9.20 at $1,202.30 an ounce.

The entire market focus of virtually place this week has been on the gold market and the beating it has taken this year. On this last trading day of the month and of the quarter, gold prices dropped about 30% in value this year and down about 25% in the second quarter alone. Reports say that gold exchange traded funds have shed ab out 22% of their value this year and have lost 16% of their total funding in this quarter. And unlike the big sell off in gold that occurred in April, this latest downdraft has not seen buyers of physical gold step up to do some bargain hunting. The gold bulls can point to the fact that the market is now technically oversold and due for at least a corrective bounce.

It will be a very important trading week next week. China manufacturing data that will be released Monday and the U.S. employment report that will be released out next Friday.

Asian stocks were stronger overnight and European stocks were mixed Friday in uneventful trading. Traders and investors are awaiting next week’s batch of economic data.

On Friday, the Bank of Japan’s deputy governor said the past three months of aggressive BOJ easing measures have been effective and he said the need for further monetary stimulus is not necessary.

Friday morning the U.S. dollar index is stable, on some slight profit taking after hitting a three-week high Thursday. The USD bulls still have technical momentum on their side.

The U.S. economic data that is released on Friday contains the University of Michigan consumer sentiment survey and the ISM Chicago business survey.

The London A.M. gold fix is $1,203.25.

Technically, the next main, longer-term downside price targets are $1,100 and then at $1,027 for nearby Comex futures. August gold futures prices are in an eight-month-old downtrend on the daily bar chart. The $1,088 price level for nearby Comex gold futures marks a 50% Fibonacci retracement level of the up-trending price move from the 2001 low to the 2011 record high. If that key technical level is breached on the downside, it would be an ominous chart development. The gold bulls’ next upside near-term price objective is to produce a close above technical resistance at $1,250.00. Bears’ next near-term downside breakout price objective is closing prices below psychological and longer-term trend-line support at $1,100.00. The first resistance is sighted at the overnight high of $1,211.40 and then at $1,225.00, as for the first support is sighted at the overnight low of $1,179.40 and then at $1,150.00.