Gold Sells Off as Debt Deal Nears
Gold (NYSE:GLD) investors took a break from their safe haven favorite in trades today, sending prices down nearly $10 per ounce, or 0.6% in futures for December delivery. Today’s close at $1,621.70 was substantially higher than earlier trading lows. Gold swooned as deep as $1,608 per ounce in early morning trades, but regained momentum amid fresh macroeconomic worries stemming from the ISM Manufacturing numbers. The ISM number fell to 50.9% in July, the lowest mark in two years, where any number above 50 represents an expansion, and numbers below 50 indicate a contraction.
Investing Insights: Are Support and Resistance Levels in Precious Metals Holding?
On the bright side, legislators made vast progress in debt ceiling negotiations today, and will likely vote on a bill to raise the ceiling and cut spending by $2.1 trillion later tonight or early tomorrow morning. However, experts and columnists have been quick to deride the deal as little more than a band-aid solution, leading commodity experts to question whether gold will see the price regression many predicted would emerge from a resolution to the standoff. According to portfolio manager James Cordier, “A pullback for gold is likely temporary. A lot of people are pulling back the layers of the onion and finding out this deal has no teeth. It just got us over the hump … the bullish fundamentals for gold have not changed that much.”
Silver (NYSE:SLV) fared worse than its yellow counterpart today, shedding 1.9% in the most actively traded September future to close at $39.31 per ounce. Copper also got dumped, losing 1.62% to close at to $4.41 a pound as the strike at the world’s largest Copper mine in Chile continued for its 11th consecutive day. Platinum and Palladium both moved higher, gaining 0.53% and 0.15% respectively.