Updated from 11:43 a.m. ET with a gold sentiment index and settlement prices
Gold for February delivery at the COMEX division of the New York Mercantile Exchange closed down $8.40 to $1,229.60 an ounce. The gold price traded as high as $1,244.70 and as low as $1,224.20 an ounce, while the spot price was losing $5.80, or 0.47%.
"It looks like the buyers have run out of steam a little bit," James Steel, chief of commodities at HSBC Bank USA, said in a phone interview from New York. "The market has been carried by short covering, mostly, I think, since the new year."
Silver prices for March delivery lost 32 cents to settle at $19.79 an ounce, while the
U.S. dollar index was adding 0.25% to $80.86.
Traders said gold has resistance -- a technical level below which the asset is likely to trade -- at about $1,250, but that physical buying in Asia has supported the price at about $1,200 for market participants who find the yellow metal cheap at that price.
What the pros are saying about Monday's gold flash crash:
- UBS Precious Metals Analyst Joni Teves: "Despite yesterday's short-lived 'mini flash-crash', gold has climbed about $60 from the late December lows on a combination of short-covering ahead of this week's index rebalancing activities and physical buying particularly out of Asia. While further upside cannot be ruled out in the short-term on the back of these factors, the macro backdrop remains intact and so are the challenges that are in store for gold for the rest of this year."
- Marex Spectron Head of Precious Metals David Govett: "Was it a fat finger causing the flash crash? Or someone attempting to manipulate the market? Or just someone selling a large order into a vacuum? I'm not sure we will ever know the truth as the CME seem very disinterested in investigating what to me are completely illogical moves, but personally I would go for a combination of the latter two."
Gold mining stocks were mostly lower, in line with gold futures. NovaGold Resources (NG) fell 2.2% to $2.69, while Newmont Mining (NEM - Get Report) slid 0.54% to $23.95 a share. Gold ETF SPDR Gold Trust (GLD) lost 0.57% to $118.82, while iShares Gold Trust (IAU) was off 0.46% to $11.96. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux