Losing Ways Continue For Gold, Silver

Published on Thursday, 28 June 2012 17:43 Written by Todd Shriber

Once again, gold and the other precious metals got no help from Europe as the yellow metal slumped following the start of the two-day European Union summit in Brussels. COMEX gold for August delivery lost $25.20, or 1.6%, to settle at $1,553.20 a troy ounce. Intraday, futures traded as low as $1,550.80 an ounce, showing traders that support at $1,550 is definitely in play and that more downside could be on the way.

As has been noted so many times this year, gold has been linked at the hip with the euro this year and with traders not willing to dial up risk in anticipation of another epic disappointment out of another EU summit, precious metals continue to falter. Simply put, without the benefit of additional quantitative easing and in the face of extended rockiness for European economies, traders have little reason to bid gold higher.

Amid a slowing global economy, gold demand is seen as tepid at best at the moment. Sagging economies in India and Italy are not enough to entice traders into the yellow metal despite the fact that Chinese demand is seen as increasing.

All of those scenarios are plaguing ETFs backed by physical holdings of gold. The iShares Gold Trust (NYSE: IAU) fell 1.2% today and looks intent to retest support at $15. Same goes for the SPDR Gold Shares (NYSE: GLD), which also fell almost 1.2% on the day. In the case of GLD, support at $150 could come into play any day now.

Turn out the lights because the party may be over for silver. On above average volume, the iShares Silver Trust (NYSE: SLV) slid almost 2% and closed below crucial support at $26. The ETF also touched a new 52-week low in the process. No one knows for sure where the pain will end for SLV, but the low $20s would seem to be a logical near-term destination.

The other white metals are being battered as well. The ETFS Physical Platinum Shares (NYSE: PPLT) lost 1.5% to make an already bad chart look worse. On volume that was roughly six times the daily average, the ETFS Physical Palladium Shares (NYSE: PALL) plunged 2%. This is another example of a precious metals ETF that looks absolutely broken at the moment.

After looking strong a couple of weeks ago, the miners are being rocked again. The Global X Silver Miners ETF (NYSE: SIL) dropped 3% on strong volume while the Market Vectors Gold Miners ETF (NYSE: GDX) gave up 2.2%. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) plunged 4% and traded as low as $18.