Gold Futures Close Soft as Dollar Firms Against Euro

On January 21, 2009, gold futures saw a softer close despite being mostly sideways during the day on the Comex division of the New York Mercantile Exchange. The February gold contract fell $5.10 to $850.10 an ounce. Some analysts attributed the selling to the metal's inability to maintain the $860 area, which it had topped in each of the last two trading sessions. Meanwhile, Leonard Kaplan, president of Prospector Asset Management, linked gold's pullback to the bounce in the dollar against most currencies.

Key Takeaways:

• Gold futures closed softer on January 21, 2009, with the February contract falling $5.10 to $850.10 an ounce.
• Selling pressure may have been prompted by gold's inability to maintain the $860 area, which it had topped in each of the last two trading sessions.
• The bounce in the dollar against most currencies, including the euro, contributed to gold's pullback, according to Leonard Kaplan.
• Silver was the only precious metal to post a gain, adding 15 cents to $11.325, on improved tone for industrial demand.
• Platinum and palladium saw losses, with April platinum falling $21.70 to $927.60 an ounce and March palladium inched down 15 cents to $184.40.
• Much of the selling in platinum appeared to be speculative in nature, including profit-taking and some stops being touched off.
• Activity from industrial end users has been "quieting down" lately, according to one trader.

Statistics:

• Gold futures fell $5.10 to $850.10 an ounce on January 21, 2009.
• Silver added 15 cents to $11.325, representing a 0.13% gain.
• April platinum fell $21.70 to $927.60 an ounce, a 2.32% decline from the previous day's close.
• March palladium inched down 15 cents to $184.40, a 0.08% decrease.

Sources:

• Dow Jones Commodities News via Comtex (Jan 21, 2009)
• Interviews with Patrick Lafferty, commodity trading advisor with MF Global, and Leonard Kaplan, president of Prospector Asset Management.