Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold plunged 2.4% as upbeat jobs data combined with a single, massive liquidation order to cause a technical sell-off, pushing the metal to a month-low close below $1,332. Comex reported a huge sell order in electronic trading just before 3 AM EDT. The unusual liquidation of 4,300 contracts triggered a Stop Logic pause of Comex trading, a safety feature designed to shut down the system temporarily to prevent cascading stop-loss executions of computer driven trades. Nonetheless, once gold broke resistance at $1,355, it pushed through its 50-day moving average in automatic selling before finding support.

The sell-off gathered momentum when the release of positive unemployment data led traders to believe the Fed is more likely to taper easing when it meets next week. New unemployment claims dropped to a 7-year low last week, although the decrease was attributed in part to a data processing problem that under-reported the totals. But the negative sentiment resulting from technical losses had already taken its toll on gold. Silver fell even harder, dropping 3.9%, while platinum surrendered 2.1%. Palladium was the outlier, edging up slightly.

At the Comex close: December gold plunged $32.10 to $1,331.70; December silver tumbled 91 cents to $22.27; October platinum fell $30.80 to $1,442.70; and December palladium added $1.60, to $692.80 an ounce.

Thomas Reuters GFMS, a leading global consultancy, published a new report forecasting gold prices rising above $1,500 by early 2014, driven by rising global demand for physical bullion in the form of bars, coins, and jewelry.