Gold Hits 4-Week Low On Bearish Outside Markets, Chart-Based Selling

Author: Paul Ploumis
12 Feb 2015 Last updated at 06:04:15 GMT
(Kitco News) - Gold prices ended the U.S. day session lower and notched a four-week low Wednesday. The precious metals were under selling pressure from a strong U.S. dollar and a resumption of the decline in crude oil prices. Technical selling pressure has also been featured recently, as the near-term chart postures for both gold and silver have deteriorated. April Comex gold was last down $12.80 at $1,219.30 an ounce. March Comex silver last traded down $0.103 at $16.765 an ounce.

Crude oil prices were lower Wednesday on follow-through selling from Tuesday’s sharp losses. A bearish weekly DOE liquid energy stocks report also helped sink the crude oil market. Oil bears have regained downside technical momentum. The other key outside market found the U.S. dollar index higher Wednesday. There are no early technical clues the U.S. dollar index has put in a market top and the greenback bulls remain very strong.

Traders and investors will closely monitor the outcome of a meeting in Brussels, Belgium Wednesday between European Union officials and Greece. Greece’s new government says it is abandoning a good portion of its debt reduction and austerity measures. Those measures were a prerequisite for Greece to get more financing from the European Union. Greece needs a new financing package by the end of this month. Germany is taking a hard line with Greece, saying the country needs to honor its previous obligations. There are worries Greece could exit the European Union, which could open the door to other, smaller EU countries doing the same. The results of the EU-Greece meeting are likely to have a significant impact on the markets: an agreement would quickly put risk appetite back into the market place, while no agreement would immediately prompt keener risk aversion.

The London P.M. gold fix was $1,223.75 versus the previous A.M. fixing of $1,235.50.

Courtesy: Kitco News