New York, May 23rd (TradersHuddle.com) – Awash in more concerns about the Euro Zone and a strong U.S. dollar, the two themes that have been hammering gold prices this year, traders extended the yellow metal’s losing streak to three days on Wednesday, though gold was able to recoup much of the big losses seen earlier in the session. Comex gold for June delivery delivery settled at $1,548.4 per ounce, a drop of almost 1.8% from Tuesday, but still better than the intraday low of $1,532.
Gold, oil and other commodities were once again plagued by a stronger U.S. dollar. The PowerShares DB US Dollar Index Bullish (NYSE: UUP) added 0.35% and is approaching its highest levels of 2012. Gold’s flirtation with the $1,525 an ounce area has traders pondering if it’s only a matter of time before Europe’s weak fundamentals force gold below that key technical area. After $1,525, next support is $1,500 and $1,485.
Greece heads to the polls once again on June 17 and this election is seen as traders the world over as a key referendum on the fate of the Euro Zone. Greece’s ability to establish a coalition government and adopt proper austerity measure are seen as key to the Euro Zone’s near-term fate. Given gold’s correlation to the euro, Greece’s fate is also gold fate, though that is something gold bugs probably don’t want to hear.
Unfortunately, gold may also suffer from downside as investors peel out of gold-backed ETFs. The iShares Gold Trust (NYSE: IAU) and the SPDR Gold Shares (NYSE: GLD) were both down 0.3% on above average turnover today. On volume that was well above average, the iShares Silver Trust (NYSE: SLV) lost 1.1% and spent much of the trading day ominously laboring below $27 before closing above there.
As has often been the case recently, the other precious metals are offering no shelter from the storm. The ETFS Physical Platinum Shares (NYSE: PPLT) lost 1.5% on volume that was a third above the norm indicating sellers are picking up the pressure on the riskier metals. Speaking of, the ETFS Physical Palladium Shares (NYSE: PALL) plunged 3% on volume that was also more than a third above usual. If PALL’s slide doesn’t end at $55, the ETF likely goes back to its 52-week low below $53.
A late day rally in equities sent the miners scorching higher, well at least that was the case for the Global X Silver Miners ETF (NYSE: SIL), which added almost 2.8% on above average trade. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) took back Tuesday’s loss with a gain of 4.6% on volume that was more than double the daily average. The Market Vectors Gold Miners ETF (NYSE: GDX) added 4.5% on volume that was also more than double the norm.
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