Metals trending down on speculation and profit taking
Metals declined rapidly last night and extended the bearish move into today's session. The dollar declined slightly against the basket of six major currencies, while oil advanced slightly and nonetheless metals managed to drop.
Spectators of metal markets generally agree that a wave of profit taking was the driver for metals to decline after gold failed in consolidating above 1130.00, triggering the downside move and activating stop-loss orders reflecting directly on the general path for gold and affecting other metals.
Gold declined in NY last night to 1102.00 closing at 1108.20 down by 1.25%. Silver ended lower by 1.50% at 17.03 while platinum retained some of its gains ending slightly higher by 0.19% at 1593.00 yet considerably lower from earlier highs at 1623.00.
Metals continued to trend south today, where as of 02:39 EST gold was trading at 1107.10 while sliver was off by 0.76% and Platinum also lower at 0.50% at 1585.00.
As for commodity indices, their performance was mixed last night, as the S&P GSCI added 2.50 points to end at 527.66 while RJ/CBR index declined slightly by 0.17 points at 274.62.
Equity indices inclined today while metals continued to decline on existing liquidity from the market. Chinese data today raised concerns over further monetary tightening from the PBoC following rising inflation. Inflation advanced 2.7% in the year ending February rising from 1.50%; the rise was led by food prices which in all exceeded expectations and approached the upper bond for the government at 3.0% this year.
Rising inflation in China, the United Kingdom and the U.S and other nations is adding further fear over the outlook for general inflationary pressures, as the global economy continues to recovery stimulating prices to start rising. The rise is still controllable and within comfortable ranges, and though central banks continue to assure that they are stable over the medium term skepticism is rising over their ability to control it especially that they are rising amid still sluggish conditions, and that was what held gold today in comparison to other metals that lean more towards industrial use and Chinese tightening will affect them negatively by suppressing demand.