Gold Fell Back Towards 5 year Lows As Investors pull Away

by on July 22, 2015 11:29 am BST

Spot gold was down 0.5 percent at $1,095.69 an ounce at 0940 GMT, while U.S. gold futures for August delivery were down $8.70 an ounce at $1,094.80. On Monday, gold slid to its lowest since March 2009 at $1,088.05 an ounce.

Gold slides towards five-year low as investors pull back from the precious metal, with a slide through key chart levels earlier this week setting prices up for further losses.

Holdings in top gold-backed exchange-traded fund (ETF) SPDR Gold Trust fell for a fourth day on Tuesday, declining another 4.8 tonnes to hit their lowest since 2008. Its reserves have nearly halved from their 2012 peak.

A looming rise in U.S. interest rates, the first in nearly a decade, has dented gold’s investment appeal, encouraging more sellers in the market after Monday’s 3 percent rout, its biggest one-day drop since September 2013.

It failed to benefit from a softer tone to the dollar and stock markets on Wednesday, which usually would be expected to give some respite to the metal.

Monday’s selloff came on the back of huge volumes traded on the Shanghai Gold Exchange after investors dumped more than $500 million of bullion in New York in four seconds during early Asian trading hours.

That sparked a slide through key chart levels, triggering stop-loss orders that added to momentum. From a technical perspective, gold remains under pressure.

Physical demand has been sluggish despite this week’s steep price drop. India is not rushing to pick up slack Chinese demand as would-be buyers wait for further price drops, with a wedding season lull and poor rains curbing appetite.

Spot platinum was down 0.9 percent at $968.95 an ounce, while palladium was down 1.1 percent at $618.90, both trading near multi-year lows. Silver was down 0.3 percent at $14.77 an ounce.