Gold Running in Place

(06/30/2009)
"Gold had a very inconclusive day on Monday, rising from the Far East to a peak of $942 in early New York trading, then plunging back to $934 at mid-morning, before moving in fits and starts through the rest of the day, to finish at $937.30/oz., down $1.70. Overnight, gold is trending higher.

Platinum peaked at $1,195 in Hong Kong, but traded range bound between $1,180 and $1,190 for the bulk of the day, ending at $1,183/oz., down $14. Overnight, platinum is pushing higher.

Silver hit its high for the day, $14.10, early on, then declined straight through with only a few temporary blips up, and closed at its intraday low of $13.84/oz., down 23 cents. Overnight, silver is sharply higher.

It was another listless day for gold, although platinum and silver took more substantial downside hits. A better showing might have been predicted, if one had known that the dollar would be essentially flat while crude shot up, but the usual suspects seem to have had a rather less-than-usual impact on metals prices lately.

Kitco's Jon Nadler wrote that gold's 'primary focus remains on U.S. dollar movements, but volatility could also come this week from the cyclical process of quarter-end book-squaring processes.' If so, that sure hasn't shown up as yet, with both Friday's and yesterday's market activity yielding little price change.

'Range bound' may be the operative word as we approach the dog days of July. James Moore, of TheBullionDesk.com, wrote that trading is expected to remain 'choppy' this week, 'although overall [gold] appears comfortable in the recent $930 to $950 range.'

Adding to the lack of movement in gold, the SPDR Gold Trust, largest ETF backed by bullion, has barely budged in recent days.

'Exchange-traded fund flows remain subdued, jewelry demand is weak, coin and investment bar buying is subdued,' wrote John Reade, of UBS in London. 'At the moment, gold ETF inflows are associated with fear, not greed, and there has been less fear around recently.'

Any sharp move in gold may have to wait until the inflationary pressure being backed up in the system by government actions finally begins to escape."

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