By: Tom Jennemann

New York 23/10/2012 - The precious metals complex was caught up in an across-the-board sell-off of commodities and equities that was triggered by weak US earnings and fresh ratings downgrades in Spain.

Gold for December delivery on the Comex division of the New York Mercantile Exchange was last down $14.30 at $1,712.00 per ounce. Trade has ranged from $1,706.70 to $1,731.20.

“Precious metals remain under pressure, with gold falling below its 50-day moving average at $1,724 this morning. We still look for support in gold around the $1,700 level,” Standard Bank said.

“We continue to see a steady improvement in gold physical demand out of Asia as gold moves lower. We expect buying strength to improve as the gold price moves lower,” Standard Bank added.

A softer euro and struggling European and US equities have only exacerbated the selling momentum in metals. The European common currency was last about a cent weaker at 1.2968 against the dollar, while the Dow Jones industrial average and S&P 500 were off 1.33 percent and 1.27 percent respectively.

In the US, the markets were dragged down by disappointing earnings report from industrial heavyweights such as DuPont and 3M, while across the Atlantic Moody’s Investors Service downgraded five of the country's regions including Catalonia.

“Gold is facing a negative outside market environment, with weaker equities, adverse currency market action and weakness in a host of physical commodity markets,” CME Group said in a market commentary.

“Apparently an up tick in Indian gold demand was seen overnight in the face of a fresh five day low in gold prices, but that news didn't seem to provide much of a cushion to gold prices overnight,” CME added.

As for the more industrial commodities, light sweet crude (WTI) oil futures for December delivery on Nymex were down $2.71 at $85.94 per barrel and the most actively traded Comex copper contract was at $3.5525 per pound, down 6.95 cents.

Comex silver for December delivery were down 48.2 cents at $31.770 an ounce. Trade has ranged from $31.65 to $32.50.

“Some traders saw the failure to hold the $32.00 level on the charts as a bearish development and that level could take on added importance into the close later today,” CME said.

Platinum futures for January delivery on the Nymex were down $31.30 at $1,580.90 per ounce, while the December palladium contract was at $594.65, down $28.00.

“There is no significant news from South Africa on the production front. However, the speculative length in platinum especially is extremely high, which raises the probability of a sell-off in the absence of real demand for metal,” said Standard Bank, adding that platinum could continue to move towards its 200-day moving average at $1,551, where it should find support.


(Editing by Mark Shaw)