New York 27/12/2011 - Gold on the Comex division of the New York Mercantile Exchange drifted below $1,600 an ounce Tuesday with today's option expiration generating some ever-so-mild selling pressure.
Gold futures for February delivery were last down $7.20 at $1,598.80 an ounce. Prices have ranged from $1,592.70 to $1,605.70.
“The market should stay in this $1,585-$1,620 area for rest of the week in choppy, low volume holiday season trade,” a US-based gold trader said.
“But we are seeing a slow lurch toward the bottom [end of the range] as few traders will be bold enough to open new positions until the calender turns. The sidelines are the preferred location,” he added.
Commodities, in general, are tame with the markets taking their cues from the quiet nature of the currency markets, Dennis Gartman, the editor of the Gartman Letter, said.
“The dollar is stable and moving very little, so unless there is something indigenous and material to each particular commodity market there is little otherwise to move those markets,” Gartman said.
“There has been little said or done regarding the problems in Europe over the long weekend, nor did anyone expect anything consequential to develop,” he added.
In the wider markets, the euro was last up about a quarter cent at 1.3083 against the dollar, while the Dow Jones industrial average and S&P 500 opened 0.16 percent and 0.29 percent higher, respectively.
Equity markets received a modest boost after the Conference Board reported that US consumer confidence rose by 9.3 points in December to 64.5, which followed a 14.3-point rise the previous month.
“Looking ahead, consumers are more optimistic that business conditions, employment prospects and their financial situations will continue to get better,” Lynn Franco, Conference Board director, said in a note.
“While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes,” Franco added.
However, not all the news was positive. The S&P/Case-Shiller index of 10 major metropolitan areas and the 20-city index declined 1.1 percent and 1.2 percent month-on-month in October. The 10- and 20-city composites also posted annual returns of -3.0 percent and -3.4 percent versus October 2010.
“There was weakness in the monthly statistics, as 19 of the cities posted price declines in October over September,” David Blitzer, chairman of the Index Committee at S&P Indices, said in a statement.
“Eleven of the cities and both composites fell by 1.0 percent or more during the month. And even though some of the annual rates are improving, 18 cities and both composites are still negative. Nationally, home prices are still below where they were a year ago,” Blitzer added.
As for the other precious metals, Comex silver for March delivery was down 8.9 cents at $28.995 an ounce in New York. Trade has ranged from $28.720 to $29.220.
Platinum futures for January delivery on the Nymex were up $6.90 at $1,436.40 an ounce, while the March palladium contract was last at $659.30, down $6.95.