London Gold Edges Lower In Early Trade

Bullion fixed at $379.60, compared to $380.70 on Friday afternoon and a London close of $380.45.

The mood was still bearish, despite golds slight recovery since sinking to 18-month lows last week, dealers said. Its failure to move out of its range was making the market nervous.

Theres a lot of uncertainty about gold as people dont know which way its going to go, a dealer said. People are anxious and certainly not keen to take positions.

Business was thin and expected to remain so with many London-based dealers busy with the start of LME (London Metal Exchange) Week, one dealer said.

 

Gold was still finding virtually no help from physical offtake at current levels, which were the lowest in over a year. The physical market is not encouraging. Theyre all waiting for it to bottom out, the analyst said.

Some dealers, however, have said gold was unlikely to revisit recent lows and was gearing up for a bounce.

Its still oversold and it wont be suprising if theres some sort of recovery, a European analyst said. But its probably more likely to test the lower end of the range.

One dealer said he was cautious that the current weakness could be a bear trap a price move which would fool some market players into gambling on the market falling further.

If it goes to $381, it will more than likely make it to $383 and $384, he said.

But other analysts said gold and the other precious metals had not yet hit bottom since setting off on a steady downtrend a month ago. Their first big downside target was seen at $370.

Selling pressure could well be returning to the precious metals soon, said technical analyst Elli Gifford of Investment Research of Cambridge. Their technicals are deteriorating consistently and the way could soon be open for some quite serious falls, she added.

Silver was indicated four cents weaker at $4.87 and trading was slack. Silver is looking worse, and theres more of a chance it will go lower, a dealer said. All the white metals were taking their cues from gold for the time being.

Platinum was off $0.90 at $383.50 and was seen in danger of drifting towards $380 support. Palladium was down $0.50 at $120.00.