London 24/04/2014 – Precious metals rebounded during late-afternoon trading in Europe on Thursday, amid choppy, technically fuelled activity and currency fluctuations.
Gold was particularly turbulent – after diving to its lowest since mid-February, it raced back to near $1,300 per ounce.
Much of the movement followed wider market reaction to US economic data. Weekly new jobless benefit claims disappointed at 329,000 but durable goods orders rose 2.6 percent in March against a forecast 2.0-percent increase.
The dollar, firm early this afternoon and nearing two-week highs against the euro, gave back much of its advance to settle around a little-changed 1.3820.
Gold’s weakness had reflected a bear raid under the fund-sensitive 100 DMA (daily moving average) around $1,280. This set off sell-stops down to $1,268.50, its lowest since February 10, 2014, before shorts were caught and forced to cover in the subsequent bounce.
The price was recently at $1,289.60/1,290.45 per ounce, up from the Wednesday close of $1,284.
Silver, which had fallen momentarily below $19.00 to touch $18.95, its lowest since December 31 last year, likewise rallied. It was recently quoted at $19.63/19.68 per ounce, up 20 cents.
In the PGMs, platinum, as low as $1,387, the weakest since February 12, 2014, recovered to $1,406/1,411 per ounce, up $1 from yesterday. Palladium at $798/804 was $12 higher – it has been more resilient given recent solid ETF inflows.
“The precious metals have had a very choppy day, with the triggering of downside stops resulting in sharp falls in gold, silver, platinum and palladium. All of the metals have since stabilised and recovered,” Standard Bank said in a note.
In the US, meanwhile, gold futures for June delivery on the Comex division of the New York Mercantile Exchange broke sharply below the 100-day moving average of around $1,280 per ounce during Asian trade, bottoming out at $1,268.40.
Buyers flooded back into the market at about 09:30 New York time, pushing the price to a session high of $1,299.00. The market has since pulled back to $1,289.70 per ounce.
“I’ve read some reports about things again heating up [in Ukraine] but I don’t really think that’s behind this morning’s wild swing [in gold]. This was all about [algorithmic trading] – once the price rebounded to $1,274-$1,275, the market shot up to nearly $1,300 in no time at all,” a US-based trader said.
“It’s been pretty intense. I wouldn’t want to be on the wrong side today,” he added.
In the other precious metals, Comex silver for May delivery last traded up 22.7 cents at $19.665 an ounce. Trade has been in an exceptionally wide range of $18.930-19.910.
Platinum for July delivery on the Nymex was up $7.60 at $1,411.50 per ounce, while the most actively traded palladium contract was at $801.80, up $15.80.
News article attributed to www.bulliondesk.com