near term gold direction? flip a coinNo true consensus amongst the gold pro traders: a majority say down, a minority say up. lol!
"Gold Is Little Changed as 7.6% Decline Fails to Spur Purchases
May 22 (Bloomberg) -- Gold was little changed in New York after the biggest weekly decline since 1990 failed to spur major purchases.
Gold dropped 7.6 percent last week after nine consecutive weekly gains. Gold has fallen 10 percent from a 26-year high of $732 an ounce reached on May 12.
``The sell-off hasn't finished yet,'' said Alan Mandel, head trader at Alan M Trading Co. in New York. ``I wouldn't be surprised to see it go under $600, and then stay there a while before there's a resumption of another dramatic move higher.''
Gold for June delivery rose 20 cents to $657.70 on the Comex division of the New York Mercantile Exchange. Futures dropped to $636.80, shedding as much as $20.70 during the session on speculation prices have to decline further to attract new buyers.
In London, gold for immediate delivery fell $2.70 to $654.90, after earlier dropping as low as $637.55. Before today, the metal had gained 56 percent in the past year.
Gold may fall to $575, said Tom O'Brien, editor of the Gold Report. ``Gold wants to build another floor like the floor we had for two and half years, but then it will go higher,'' O'Brien said.
The metal may lose its appeal as a hedge against inflation as the U.S. Federal Reserve signals it will continue to raise interest rates and oil trades below $70 a barrel.
``Gold traders see the Fed acting more aggressively to contain the price pressures,'' said John Person, an analyst at NationalFutures.com in Palm Beach, Florida. ``Higher rates may help contain inflation. Gold would certainly lose its attractiveness as a hedge against the perception of higher inflationary pressures.''
Stronger Dollar
A stronger dollar helped pushed metal prices lower. Gold traditionally moves in the opposite direction of the U.S. currency. During gold's nine-week climb, the dollar traded at a one-year low against the euro.
``The dollar's resurgence is certainly a contributing factor'' to gold's decline, said Jim Pogoda, an investor in Summit, New Jersey, and a former precious-metals trader for Mitsubishi International Corp. ``I'll stay bearish.''
Half of the 36 traders, investors and analysts surveyed by Bloomberg News from Sydney to Chicago on May 18 and May 19 advised selling gold this week. Fourteen recommended buying, and four were neutral.
Silver futures for July delivery rose 7 cents or 0.6 percent to $12.43 an ounce. Prices reached a 23-year high of $15.20 on May 11.
The 19 commodities in the Reuters/Jefferies CRB Futures Price Index, which last week 6.4 percent last week, the biggest drop since 1980, rose 1.6 percent today.
``I think the selling's over,'' said Michael Purdy, vice president of metals trading at ABN Amro Bank in New York. ``The market, from a position standpoint, from a speculator standpoint, is much cleaner than it was, and I think the fundamentals will soon take hold, and I think we're just going to resume the rally pretty soon.'' "