Spot gold continued its steady decline in afternoon trade as traders shed positions ahead of tomorrow’s long term Spanish bond auction. A stronger U.S dollar also weighed on the complex.
What appears to be a “risk on” day gold slowly dripped lower. With a lack of major, fresh fundamental news to drive the gold market recently, trading has been mostly technical in nature. The euro dollar, after a sell-off yesterday is trading back above 1.3100 but the metal complex remains weak.
"The whole complex succumbed to waning investor enthusiasm, most likely due to eurozone uncertainty sparked by the approach of tomorrow's Spanish bond auction,a strengthening dollar is adding to the downward bias of precious metals." Standard Bank wrote in their daily report.
The narrow range of gold continues with key targets still held in place. $1611 on the down side remains a critical point as we have traded to there twice, while on the top side $1697 holds. A break of either of these levels should define where the yellow metal is going. Key data for release tomorrow is the U.S initial jobless claims we will see if last week’s disappointing number was just a one off situation due to the Easter weekend. Also of note is next week’s Fed minutes and traders and investors will be watching closely if the Feds give any hint of QE3. The markets main focus will be on the Eurozone and the bond auction tomorrow, so stay tuned.
Spot silver dribbled lower as well moving to $31.37, slightly higher than yesterdays low. It too, has held its range of $31.00 on the downside and $32.50 on the top side. A break of either one yields the short term direction. The Dow Jones Industrial average gave back some gains of yesterday’s triple digit day, which also kept the dual role metal in check. The gold silver ratio remains locked and loaded, it’s respecting its own range of 51.20 and 52.80.