Gold Prices Can't Sustain Rally
NEW YORK (
) --
were falling Wednesday as investors lost their risk appetite.
Gold for April delivery was falling $11.60 to $1,110.70 at the Comex division of the New York Mercantile Exchange. Prices have traded has high as $1,128.30 and as low as $1,110.70. The U.S dollar index was slipping 0.12% to $80.49. Gold's spot price was slipping over $8 according to Kitco's gold index.
Investors are still waiting for a resolution on Greek sovereign debt, but the euro was finding some support, which was helping gold prices. Prime Minister Papandreou met with President Obama, who reportedly showed support for Greece but gave no indications of financial aid. The European Commission is working on a proposal for a European monetary fund to assist struggling eurozone countries, but Greece and Portugal have yet to officially ask for help.
Tempering gold's upside was the news that
rose by 44.7% last month, crimping its trade surplus. Many analysts fear that China will raise rates and seek to put the brakes on its economy, which would be a negative for gold prices. Consumer demand in China for 2009 grew 7% from 2008 to 461.90 tons, one of the only countries to report growth, according to the World Gold Council's gold demand trend report.
Gold was also falling as after the Department of Commerce reported a 0.2% decline in January wholesale inventories, analysts were expecting an uptick.
"Initial buying interest has boosted gold," says James Moore, analyst at thebulliondesk.com in his daily metals report. "
Gold has stalled ahead of chart resistance at $1,127. ... Risk appetite resulting from EU debt news and currency fluctuations will continue to provide short-term direction although we expect investment demand to provide scaled-down support."
were falling 8 cents to $17.25 while copper was down 3 cents at $3.37.
Mining stocks, a more leveraged way to
, were mixed.
Barrick Gold
(ABX)
was down 1.32% at $39.02, and
Newmont Mining
(NEM) - Get Report
was slippingslightly to $50.56. Other large-cap miners
Kinross Gold
(KGC) - Get Report
and
Goldcorp
(GG)
were trading at $18.27 and $40.10, respectively.
Shares of
Freeport McMoRan Copper & Gold
(FCX) - Get Report
were rising 0.84% to $80.42, while
Yamana Gold
(AUY) - Get Report
was down to $10.06.
The popular physically backed ETF
SPDR Gold Shares
(GLD) - Get Report
was lower to $108.87.
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Written by Alix Steel in New York
.
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.
