Gold extends losing streak; silver taps fresh low
MADRID (MarketWatch) — Gold dropped Monday, on track for an eighth straight session of losses, putting it on track for its longest losing streak in four years, while silver futures fell to a level not seen in since September 2010.
Gold prices have fallen more than 7% this month — following April’s loss of 7.8% — with the market hurt by constant outflows from gold-backed exchange-traded funds, including SPDR Gold Trust /quotes/zigman/41663/quotes/nls/gld GLD -0.03% .
Gold’s latest drive lower came after data released Friday from the Commodity Futures Trading Commission reportedly showed big money managers and hedge funds held 74,432 short contracts on gold, or bets the metal’s price will fall. It was the highest level of funds holding short contracts since June 2006.
Gold for June delivery /quotes/zigman/647778 GCM3 -0.85% pared earlier losses from a drop of about $21 to $8.40, or 1.6%, to $1,356.10 an ounce. The last time gold fell for eight consecutive sessions was in 2009, with that run ending on March 4.
Through Friday, the most actively traded June contract had dropped by $109 over the past seven sessions.
A rally in U.S. stocks to record highs, strengthening in the U.S. dollar /quotes/zigman/1652083 DXY -0.17% and speculation that monetary stimulus by the U.S. Federal Reserve will soon come to an end have also hit gold prices.
Falling alongside gold, silver for July delivery /quotes/zigman/652548 SIN3 -3.45% on Monday slid 59 cents, or 2.7%, to $21.75 an ounce. Silver has marked a session low of $21 — $20.84 according to some charts — a level not seen since September 2010. Silver prices fell 11% on April 15.
Ross Norman, chief executive officer of Sharps Pixley, said silver is oversold both technically and fundamentally.
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“The whole commodities sell-off is incompatible with the notion that we have a normalizing macro-economic environment,” said Norman in emailed comments. "The equity markets at all-time high should suggest growth and future profits — yet the resources by which are to be achieved are not being bought, but sold. With global GDP slowing and inflation both falling, it appears we have a sharply slowing economy.”
Other metal prices on Monday were under pressure as well. June palladium /quotes/zigman/9144962 PAM3 -0.32% pulled back $5.25, or 0.7%, to $735 an ounce. Last week, palladium gained 4.9%.
July platinum futures /quotes/zigman/9544538 PLN3 -1.32% lost $17.50, or 1.2%, to $1,450.50 an ounce, extending last week’s decline of 1.2%. July copper /quotes/zigman/678445 HGN3 +0.06% was flat at $3.33 a pound. The metal on Friday logged its first weekly loss in four weeks, giving up 0.9%.
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