Aluminum price soars as China cancels tax incentive on exports
Futures in London jumped as much as 8.5%.
A volatile trading day on Thursday saw spot gold fall to a 10-week low of $1,627 an ounce, breaching a crucial level according to technical analysts.
While the precious metal fought back in late trade regaining the $1,640 an ounce level Marketwatch quotes analysts at Insignia Consultants as saying that “a close below $1,625 an ounce will prompt a technical breakdown”.
They went on to say that “only a daily close above $1,664 will result in bullish trend” adding that any spikes upward “should be used as a selling opportunity.”
The FT quotes Kamal Naqvi, head of commodity investor sales at Credit Suisse as saying “Sentiment towards gold is as low as it has been for many years, possibly since the rally started. … For virtually the first time this cycle, buying gold is a contrarian trade.”
The paper also provides a particularly downbeat assessment of physical demand in today’s gold market:
The US Mint’s sales of American Eagle gold coins, seen as a good indicator of investor sentiment, fell in February and March to their lowest level since mid-2008, down about 70 per cent from last year. Open interest in gold futures on Comex in New York is close to a 2½-year low.
More worryingly, traders say, the physical markets Asia and the Middle East, which have traditionally provided a backstop to gold when prices fall, are also quiet. In India, historically the largest consumer of physical gold, the government last Friday announced it would double taxes on gold imports, triggering outrage among the country’s jewellers, who closed their shops this week in protest.
