(Repeating for technical reasons)
SAN FRANCISCO (AFX) - Gold futures fell Tuesday to tally a four-session loss
of more than 6 usd an ounce and close at a fresh three-week low as traders
looked to movements in the US dollar.
Gold for February delivery closed at 420.80 usd an ounce, down 1 usd for the
session. The contract, which has now lost a total of 6.10 usd over four
sessions, ended at its lowest level since January 10. April gold closed at
422.90 usd an ounce, down 1.20.
"Gold remains on the defensive on the belief the US economy can miraculously
boom despite a plethora of deficits and a consumer awash in debt," said Peter
Grandich, editor of The Grandich Letter, an investment advisory publication.
"Friday's employment release is setting up to be the most likely influence
on gold's near-term direction," he said.
But "the fact that the short position of large funds on the [Commodities
Exchange division of the New York Mercantile Exchange] is the highest since 2001
and bullish sentiment has all but disappeared in the gold community, suggest we
could see a major bottom in gold within days," he said.
A drop all the way to the 410 usd level can't be ruled out, he added.
For now, "with the dollar trying and struggling to move higher, gold is just
not ready to go yet," said Dale Doelling, chief market technician at Trends In
Commodities.
"When the dollar breaks [lower] -- which could be very soon -- gold should
move back through 430 usd and far beyond that."
On Tuesday, the dollar was modestly firmer against its chief rivals in the
wake of mixed US economic data on the factory sector and construction spending.
The reports were seen as doing little to counter widespread forecasts for a
dollar-supportive Federal Reserve interest-rate increase on Wednesday.
Looking ahead, the market eagerly awaits two events on Wednesday's calendar:
the Federal Open Market Committee's announcement on US interest rates and later,
President Bush's State of the Union speech. And the Group of Seven, representing
finance and monetary officials from the world's largest industrialized
economies, will meet in February 4-5 in London.
But the Fed announcement will come after the end of Wednesday's metals
trading session, so currency trading will remain under close scrutiny, with any
dollar weakness likely attracting some buying, said Charles Nedoss, an analyst
at Peak Trading Group.
Other metals futures in New York ended mixed Tuesday. March silver fell 1.7
cents to close at 6.73 usd an ounce, while the March copper contract ended at
1.416 usd a pound, down 1.9 cents.
But March palladium closed at 191.40 usd an ounce, up 1 usd for the day, and
April platinum tacked on 5.10 usd to close at 878.90 usd an ounce.
Tracking inventories, copper supplies were unchanged at 45,817 short tons as
of late Monday, according to Nymex. Silver stocks were down 3,004 troy ounces at
102.4 mln troy ounces. Data on gold inventories hadn't been updated by the
exchange since late Wednesday.
Meanwhile, indexes tracking mining companies' shares closed only modestly
higher Tuesday.
"The mining indexes are down to a critical short-term support level where
they bottomed on January 6," said Ben Johnson, president of First Securities
Northwest.
"Any weakening from here would be a breakdown and suggest lower gold prices
over the short to medium term," he said.
The Philadelphia Gold and Silver Index moved 0.3 pct higher to close at
91.68 points after having registered an 8 pct loss for the month of January.
The CBOE Gold Index closed at 81.93 points, up 0.6 pct, while the Amex Gold
Bugs Index tacked on 0.7 pct to end the day at 202.89.
Among individual stocks, shares of South African miner DRDGold tacked on 6
cents, or 4.6 pct, to close at 1.37 usd, and Idaho-based Coeur d'Alene Mines
added 13 cents, or 3.7 pct, to end at 3.66 usd.
The bigger losers included Reno, Nev.-based Meridian Gold, which closed at
18.24 usd, down 25 cents, or 1.4 pct.
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