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Tuesday, September 23, 2014

Fourteen month high dollar pressures bullions

Silver prices hit four-year lows on Monday 


Bullion metals ended in a mixed mode on Monday, 22 September 2014 at Comex. Silver prices hit four-year lows on Monday, while gold prices recovered to snap a four-session losing streak, supported by a weak stock market. U.S. equities were pressured by softer U.S economic data, including a drop in existing home sales. 

Gold for December delivery rose $1.30 to settle at $1,217.90 an ounce. 
 
December silver was off 8 cents, or 0.5%, to $17.70 an ounce. 

The sell-off in the U.S. stock market on Monday prompted some of the very light buying interest in gold. The U.S. dollar index hit a 14-month high on Monday, which combined with very bearish technicals in gold and silver have allowed the precious metals sellers to dominate. 

In overnight news, China's finance minister said his nation will not offer a more stimulative domestic monetary policy or other economic stimulus measures despite some recent weak economic data coming from the world's number-two economy. This news was seen as another bearish clue for the raw commodity sector, including precious metals. There is a key report on manufacturing activity in China due out on Tuesday. 

There was a Group of 20 industrial nations meeting in Australia during the weekend. The G-20 pledged to continue to work to boost global economic growth. The group said present world economic growth levels are “uneven” and below levels deemed healthy. The group also said the inflation rate in the European Union is “dangerously low.” 

On the geopolitical front it has been quieter the past few weeks. That has pushed safe-haven gold prices to a nine-month low, with silver prices hitting a four-year low. 

U.S. economic data released Monday included the Chicago Fed national activity index and existing home sales. Neither report had a significant impact on the precious metals markets. 

Existing Home Sales for August fell 1.8% to 5.05 million SAAR from a slightly downwardly revised 5.14 million SAAR (from 5.15 million SAAR) in July, while the consensus expected an increase to 5.20 million. The report revealed the first monthly drop in sales since March and overall sales are still down 5.3% year-over-year.
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