Following last week’s surprise gain that culminated with a monster rally in the last two days of the week, gold futures could not hold onto those gains on Monday. Fortunately, the losses were small as Comex gold for June delivery, fell $3.20, or 0.2%, to settle at $1,588.70 a troy ounce. Still, it’s fair to say one-day loss of $3.20 an ounce is a drop in the bucket compared to the $55 an ounce gold added on Thursday and Friday of last week.
A weaker dollar didn’t help the cause as the PowerShares DB US Dollar Index Bullish (NYSE: UUP) closed modestly lower on the day, but the action in gold appeared to me more profit taking than anything else. As has been previously noted, the Group of Eight meeting over the weekend saw those countries announce they believe Greece will remain part of the Euro Zone, comments that should have been supportive of more upside in gold today.
While futures settle lower, ETFs were able to eke out small gains. The iShares Gold Trust (NYSE: IAU) and the SPDR Gold Shares (NYSE: GLD) both closed slightly higher on the day. Waning enthusiasm for the U.S. dollar and seasonal factors could propel gold to additional gains in the coming days, but the caveat there is "only if Europe cooperates."
Silver futures settled lower, dragging the iShares Silver Trust (NYSE: SLV) to a small light volume loss in the process. SLV still remains in a precarious technical position and the fund needs to absolutely hold support at its 52-week low of $25.65 or risk a savage sell-off.
Despite the weakness in gold and silver futures today, platinum and palladium both notched strong finishes, indicating risk on was back on for at least one day. The ETFS Physical Platinum Shares (NYSE: PPLT) rose 1.1% on above average, but don’t get too excited about the 1.7% jump for the ETFS Physical Palladium Shares (NYSE: PALL) because that came on volume that was about 75% below the daily average.
The miners and their respective ETFs continue to show signs of capitulation as the group booked another day of solid gains. The Global X Silver Miners ETF (NYSE: SIL) added 3.1% while the Market Vectors Gold Miners ETF (NYSE: GDX) impressed with a gain of 3.4%. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) used a 4.1% gain to rally back above $19 and could run another 10% before bumping into next resistance.
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