Gold Stays Largely Steady At Low 1340s

Gold was more volatile in the morning - both ways - than it was in the afternoon. The settle-down in the last several hours of trading provided a needed respite, but the metal still ended up lower on the day. Due largely to yesterday's plummet, it ended the week with a $19.40 loss. Had there not been some gains earlier in the week, it would have fared worse. As this article notes, increasing optimism about the economy is taking a toll on gold.

After trying to break above $1,345 before the pit session started, the metal fell back into the upper part of the $1340-45 range. Then, starting at 9 AM ET, it lurched downwards to fall slightly below $1,340. A bit of fluctuating around $1,340 preceded a temporary spill down to the day's low of $1337.00. After being shaken, the metal climbed back up into the range; a later fall below $1,340 was little more than a blip. Climbing after that blip, it reached a pit-session high of above $1,347 before, once again, descending back into the range.

With the exception of occasional blips above, gold settled into a narrower range between $1,341 and $1,344 for the entire afternoon. By 4:00 PM, the range narrowed even further as the week approached its end; from then to the close, gold stayed between $1,342 and $1,343. At the end for the week, the spot price was $1,342.40 for a drop of $3.20 on the day. The Kitco Gold Index attributed -$15.20 to predominant selling and +$12.00 to a weakening greenback.

Gold's six-month chart, from Stockcharts.com, shows its plummet leveling off today but also shows its decline continuing nonetheless:



Today's drop, although a small one, endorsed yesterday's breaking of the metal's $1,350 support level. At the end of the week, the picture still looks bearish. There may be more bargains in store for Asian physical buyers come Sunday night.

Turning to the U.S. Dollar Index, its day was one of sometimes interrupted decline. Evidently, this week was not a good one for safe havens. As high as 78.66 at 7:00, the Index hardly retraced as it slid downwards subsequently. There was a time in late morning and early afternoon when it declined hardly at all, but the overall trend was still downhill. At the end of the trading week, at 5 PM, it closed at 78.11.

Its own six-month chart shows it putting a fair bit of distance from its former support level of 79:



Yesterday's poke above 79 didn't last. I thought that reaction would make its trip downwards gentler, which proved to be inaccurate, but downwards it's still going. As with gold, the two technical indicatiors at the top and bottom of its chart are both bearish. There may be another secondary reaction soon, but for all intents and purposes the greenback's in a downtrend.

This week started off as a fairly good one for gold, but yesterday's plummet made it a rotten one. Physical buying is still adding some cushion to the metal's decline, but the shying away of investment demand has taken a real piece out of its price. Next week may see a further respite, but the signs showing as of now make $1,325 still loom in the background.

In closing, thanks for stopping by and reading what I've got to show here. Have a great weekend; may it not be too cold for you. [I hear things are bad even in Australia.]