- Traders ‘threw in the towel’ as prices lost momentum: Evans
- Metal fails to break above three-week high reached on Aug. 2
As far as technical indicators go, the gold rally is losing steam -- and the market is finally taking notice.
Gold futures posted the first back-to-back weekly losses for a most-active contract in more than two months after prices failed to break above the three-week high reached on Aug. 2. Futures ended lower on Friday, even after prices shot up following the release of disappointing U.S. government data that weakened the case for the Federal Reserve to raise interest rates.
“We lost momentum from that early move,” Tim Evans, the chief market strategist at Long Leaf Trading Group Inc. in Chicago, said in a telephone interview. “I think a lot of the buyers that propelled that early move up just threw in the towel, and brought us back to the lower part of the range.”
Bullion’s moving average convergence-divergence indicator, a gauge of price momentum, has been below the signal line since Aug. 5, showing downward pressure on prices, according to Gary Christie, a senior technical analyst at Trading Central in Ottawa. Prices have fallen 2.5 percent from a two-year high in July.
Gold futures fell 0.5 percent to settle at $1,343.20 an ounce at 1:39 p.m. on the Comex in New York, wiping out this week’s gains. Earlier, prices advanced as much as 0.9 percent after U.S. government data showed retail sales stalled in July, while wholesale prices unexpectedly fell, a sign inflation is likely to stay muted.
In other metal news:
- Holdings in gold-backed exchange-traded funds added 0.94 metric ton to 2,039.9 tons on Thursday, data compiled by Bloomberg show.
- Silver futures also slipped on the Comex, while palladium and platinum declined on the New York Mercantile Exchange.