NEW YORK (
TheStreet ) --
lost their luster Friday and were sinking double digits while the
Dow Jones Industrial Average
also dropped more than 200 points.
Gold for August delivery closed $20.10 lower at $1,188.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Friday has traded as high as $1,210.90 and as low as $1,185.80. The
was rallying 0.15% to $82.50 while the
euro was up 0.14% to $1.29 vs. the dollar
. The spot gold price Friday was down more than $17, according to Kitco's gold index.
Investors broadly sold out of stocks and gold and opted for cash as they digested a slew of economic data and earnings reports. At first traders applauded the news that
. The fine was easy for investors to swallow as Goldman can earn that amount in two weeks.
Stocks had been tentatively higher in morning trading and gold was under modest pressure as investors focused on good news from equities. Markets weren't able to hold on to their rally and took a turn for the worst after weak earnings reports from
Bank of America
. Typically, gold would be a safe-haven asset as investors fret about the earnings power of the financial sector, but the news that core consumer prices rose only 0.2% in June spooked gold traders.
Consumer prices measure how much people pay for goods and services, otherwise known as an inflation indicator. The weak reading, however, took the inflation trade off the table and those investors who were buying gold as a hedge against inflation unwound those positions.
Also contributing to gold's downside was a stronger U.S. dollar as traders rushed into cash and treasuries. A stronger currency makes gold, a dollar-backed commodity, more expensive to buy in other currencies.
Some traders are hoping that any gold selloff is short-lived as bargain-hunters look to buy the metal at "discount" prices. "Strong physical demand below the $1,200/oz level, particularly in Asia, is supporting gold in the traditionally weak "summer doldrums" period," says Mark O'Byrne, executive director of GoldCore.
"A higher weekly close, above $1,211/oz would be bullish and might lead to a challenge of resistance at $1,218/oz next week. A lower weekly close could see us dip below the $1,200 level and test technical support at the 100 day moving average at $1,178/oz."
Video: Gold Prices Ready to Rally >>
as profit-takers and bargain-hunters dominated trading. A slew of weak economic data from falling prices to weak regional manufacturing data prompted investors to sell gold to cover losses in other assets while simultaneously increasing gold's appeal as a safe-haven asset. Gold's schizophrenic trading will probably continue throughout the summer as trading thins and physical buying in India wanes.
The popular gold exchange-traded fund,
SPDR Gold Shares
, lost 1.82 tons in the past week. The dip is not a huge amount but does indicate that some investors are slowly unwinding their gold positions. Gold prices fell almost 2% this week.
settled down 57 cents to $17.78 while copper closed 8 cents lower at $2.92.
Gold mining stocks, an alternative way to
, were plummeting along with broader equities.
Freeport McMoRan Copper & Gold
was sinking almost 5% to $60.03 while
was losing 4.48% at $4.69. Other gold stocks
were trading at $12.99 and $4.85 respectively.
Written by Alix Steel in New York
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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.