Gold Declines Amid Global Worries

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Gold Declines amid Global Worries

Prices for gold dropped after the emergence of fresh sales by stockists while investors were triggered by wider global sell-offs overnight.

Prices for silver dropped to the lowest in four years due to sluggish demand.

According to Fox Business, gold dropped below $1,200 per ounce the first time on Friday while the dollar jumped after US payroll data was better than expected.

Spot gold dropped 1.45 to the lowest level since December 31 at $1,195.38 per ounce and it dropped 1.3% at $1,197.06. US gold futures slipped to $1,196 per ounce.

Bloomberg Business Week quoted Walter “Bucky” Hellwig of BB&T Wealth Management as having said, “There are a lot of headwinds for gold prices right now, because it’s hard to find any inflation, and the dollar has been so strong.”

Hellwig added, “In the domestic and global economy today, if you had a checklist of things that might make gold prices go higher, it’s hard to find anything that might check the box.”

Around 5,973 lots of $1,100 gold for December put exchanged hands on Friday, with 100 ounces per contract. The contract rose 56% to $6.70, the highest from April 2013.

$1,125 gold for December put was the option that was most traded and it climbed the highest in over one year.

RBC Capital Markets LLC George Gero said, “Today’s options trading signal that there’s a large bet that prices will go lower. The puts are like a magnet drawing prices down to that area.”

December delivery futures dropped 1.8% settling at $1,192.90 per ounce after reaching $1,190.30, the lowest level since December 31.

Hellwig said, “The strong jobs report means the market is interpreting it as that the Fed will probably follow through with raising short-term rates sometime next year. That’s the opposite of what you need for gold prices to go higher.

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To contact the reporter of the story: Jonathan Millet at john@forexminute.com