Tags: Gold | Futures | Investor | Record

Gold Futures Fall on Investor Sales After Metal Rises to Record

Wednesday, 27 Jul 2011 03:35 PM

Gold futures fell on investor sales after the precious metal rose to a record $1,631.20 an ounce.

The 14-day relative-strength index for gold topped 70 in the previous two days, a signal that prices may fall. Gold reached the record as the cost of insuring U.S. debt rose to a 17-month high. Congressional leaders offered competing budget plans to avoid a $14.3 trillion default.

“A lot of people rode the wave higher in gold, so there are itchy trigger fingers when it comes to booking profit,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview.

Gold futures for December delivery fell $2, or 0.1 percent, to settle at $1,617.30 at 1:59 p.m. on the Comex in New York. The price has gained 14 percent this year.

Holdings of gold in exchange-traded products rose 0.3 percent to a record 2,128.229 metric tons yesterday, data compiled by Bloomberg show.

Some investors also may be selling gold to cover increased deposits on margin accounts in other markets, Zeman said. The Standard & Poor’s 500 Index fell for a third straight day.

The U.S. has until Aug. 2 to raise the debt ceiling. Moody’s Investors Service, Standard & Poor’s and Fitch Ratings have said they will cut the U.S.’s top-level credit rating should a failure to raise the debt ceiling lead to a default.

“Investors are focusing on a downgrade,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “A downgrade increases the cost of carrying this debt. The level of U.S. government borrowing has caused the erosion of the dollar and adds more fuel” to gold’s rally, he said.

Silver futures for September delivery fell 13 cents, or 0.3 percent, to $40.568 an ounce on the Comex.

Platinum futures for October delivery gained 80 cents to $1,808 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery dropped $2.90, or 0.3 percent, to $833.20 an ounce.

© Copyright 2017 Bloomberg News. All rights reserved.

1Like our page
2Share
Markets
Gold futures fell on investor sales after the precious metal rose to a record $1,631.20 an ounce.The 14-day relative-strength index for gold topped 70 in the previous two days, a signal that prices may fall. Gold reached the record as the cost of insuring U.S. debt rose to...
Gold,Futures,Investor,Record
329
2011-35-27
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved