Gold softer in Europe, holds above key support
LONDON (Reuters) - Gold prices cut losses during afternoon trading in Europe, with the market managing to avert heavier falls as key downside support held, traders said.
The market was still under pressure, however, following overnight investment fund liquidation, against the background of a firmer dollar which was around two-week highs.
“It held at $438.00 – just – so we are still ranging at the moment,” a trader said.
By 1444 GMT, spot gold was indicated at $440.70/441.50 an ounce, against New York’s late levels on Wednesday at $439.90/440.70.
“There was some jobs data (weekly U.S. jobless claims), but that was much as expected. So for the moment, it (gold) will keep an eye on the currencies. Support is around $438.00/440.00, while the resistance starts first at $445.0 then $450.00 ,” the trader added.
Analysts said the market remains extremely vulnerable to an aggressive sell-off given the sizeable amount of long positions that had built up since last week.
“Any renewed price weakness could easily become self-fulfilling,” Alan Williamson of HSBC Bank said in a report.
“Many of the fresh longs taken out last week are likely to be protected by stop-loss sell orders just below current levels. This could be the trigger to a more aggressive move to the downside.”
Chart analysts said a break of $438 would open the way for a slide to $430 and possibly all the way back to the mid-July lows around $418.
Elsewhere, silver clung to the $7.00 level, and was quoted at $6.99/7.02 from $6.97/7.00.
Platinum stabilised after sliding overnight to its lowest in three weeks at $879. Spot prices were last at $888.00/891.00 versus $891.00/894.00.
Palladium was unchanged at $183.00187.00.
Source: Reuters
