Germany Chancellor plans lithium deal with Serbia after Rio ruling
Olaf Scholz plans to visit Serbia this week to secure supplies of lithium that are critical for the nation’s energy transition and auto industry.
Last week gold registered its worst weekly performance for 2012 after a sustained rally in January and most of February.
The Dubai Chronicle argues that this week would be a crucial test for the yellow metal – a significant break below the $1,700 level could trigger a major sell-off.
“Failure to stem the selling pressure” represents a major problem for the gold market given gold’s trading behaviour in 2011 and if it should breach the technically significant $1,631/oz level, all bets are off says the Dubai Chronicle.
Gold futures ended last week in New York close to $70/oz or over 3.5% down at $1,710 an ounce.
The losses came after a dramatic trading day on Wednesday when the yellow metal lost almost $80/oz in an hour after a single sale order of 1 million ounces or 31 tonnes.
The Dubai Chronicle cites four major reasons for the weekly decline:
Trading in gold futures has become more volatile recently and many traders and analysts say bullion’s failure to break through $1,800/oz represents a major setback for the prospects of the precious metal.
The last time contract gold settled above the $1,800 an ounce mark on September 20 it shortly thereafter shed more than $100 over just a few trading days.
That was not the first time traders got cold feet after breaking an important psychological level.
A similar pattern was followed in the days after gold futures hit a record high above $1,900 an ounce in August. The yellow metal fell precipitously two days after hitting the record, losing $105 or 5.6% in value in a single day.
In 2011 trading in gold was the most volatile since 1980, with the gap between the year’s highs and lows coming in at close to $600 an ounce or a 32% range. In 1980, when gold hit a record $850 an ounce, the spread was even greater at more than 40%.
