Gold drops to two-week low as technical indicator signals losses

by **Cals** Mon 21 Apr 2014, 23:28

Business & Markets 2014

Written by Bloomberg

Monday, 21 April 2014 19:33

(Apr 21): Gold retreated to the lowest level in more than two weeks as a technical indicator used by some traders signaled further declines. Silver also fell.

Bullion for June delivery fell as much as 0.9 percent to $1,281.80 an ounce, the lowest since April 2, and was at $1,287.10 an ounce at 7:12 a.m. on the Comex in New York. Prices lost 1.9 percent last week to $1,293.90, closing below the 200- day moving average.

The metal has pared this year’s advance to 7 percent as investors assessed prospects for further cuts to the Federal Reserve’s stimulus program amid signs of recovery in the world’s largest economy. While tension between Ukraine and Russia spurred gains in the past month, there has been little physical buying at current prices, according to Kate Harada, precious- metals general manager at Tanaka Kikinzoku Kogyo K.K. in Tokyo.

“Gold closed last week below its 200-day moving average, which is a bearish technical factor that may pressure the gold market,” said Liu Xu, a precious metals analyst at Capital Futures Co. in Beijing.

Hedge funds trimmed bullish bets on gold for a fourth week, the longest streak this year. The net-long position contracted 8.5 percent to 90,137 futures and options in the week ended April 15, the lowest since mid-February, U.S. Commodity Futures Trading Commission data show. The investors more than doubled bets on lower prices in the past month, while reducing wagers on a rally in six of the past seven weeks.