Gold prices lost luster Monday as demand induced by
quantitative easing, or QE3, eroded and the stock market climbed
onCitigroup 's (
) third-quarter profit surprise as well as strong retail sales
data, which eased fears of slower economic growth and hopes for
Spot gold prices fell 1% to $1737.70 an ounce.
SPDR Gold Shares (
), tracking a 10th of an ounce of bullion, gapped down 1.1% to
Market Vectors Gold Miners ETF (
) skidded 1.06% to 51.11.Market Vectors Junior Gold Miners ETF (
) slipped 2.3% to 23.46.
"Gold is down to levels seen just before (Federal Reserve
Chairman Ben) Bernanke and associates announced QE3," said
Jonathan Citrin, founder and CEO of CitrinGroup, a registered
investment adviser in Birmingham, Mich., with $60 million in
assets under management. "Ultimately, as expectations on the need
for stimulus subside, the precious metals may see continued
GLD, GDX and GDXJ all remain above their key 50-day moving
averages, suggesting their uptrends remain intact. Pullbacks to
moving averages are normal after strong run-ups.
While the gold hit price resistance at $1,800 an ounce, it's
unlikely to fall below $1,700 an ounce, says Peter Spina,
president of Goldseek.com in Littleton, Colo.
"The main catalysts behind gold's strong physical demand
remains in place," said Spina. "Despite a period of short-term
weakness, the underlying fundamental economic and monetary issues
will mean ongoing debt monetization globally, and with global
competitive currency devaluations, gold will continue to benefit
from these issues going forward."
He believes gold will be higher by year's end.
Gold prices could correct another $200, says Holmes Osborne of
Osborne Investments in Santa Monica, Calif., with $500 million in
assets under management.
"It just had to slow down," he said. "Gold is volatile."
Gold is staging a small correction ahead of the presidential
debate tomorrow, said Victor Sperandeo, CEO of EAM Partners at
Grapevine, Texas. He recommends buying on the dip.
"Thoughts are (President Obama) will do better and the markets
are taking profits just for the sake of a decent cash-in,"
Sperandeo said. Gold "will trade higher towards the election.
Gold is bullish no matter who wins."
PowerShares DB U.S. Dollar Index Bullish (
), which measures the greenback against a basket of major foreign
currencies, ticked up 0.13% to 21.86. It tends to move opposite
Spot silver futures dropped 2.21% to $32.84 an ounce.
IShares Silver Trust (SLV) gapped down 2.31% to 31.70.Global X
Silver Miners ETF (SIL) lost 1.28% to 24.06. Both SLV and SIL are
holding above their 50-day moving averages and remain in
The silver market appears increasingly overbought, says Mark
Ground, a precious metals analyst at Standard Bank. Silver ETFs
shed 25.5 tons from their silver holdings this past week, he
wrote in a report Monday. This marks the second week of decline
after hitting a 2012 high of 19,253 tons.
Precious metals prices started falling Friday on
better-than-expected consumer data and marginally stronger
producer inflation readings, which both lowered expectations for
more economic stimulus. On top of the strengthening dollar,
Chinese exports increased 9.9% year over year, questioning the
need for more stimulus in the People's Republic, Ground
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