Gold slides down again

This time, in the overnight markets. Spot gold dipped to slightly below $1,090 at about 3:30 AM ET, and then established a trading range. As of the time of this post, it's at $1,90.30

This Bloomberg report attributed the drop to a rise in the U.S. dollar, which rose on recovery hopes. It quote an analyst who's surprisingly bearish short-term, given that he's a long-term bull:

“Gold may fall to $900 before investors and the public at large try to buy and hold the market,” said Bernard Sin, head of currency and metals trading at bullion-refiner MKS Finance SA in Geneva. “I am dollar bullish because I believe the U.S. economy can grow.”... Safe-haven demand will probably help gold in 2010, pushing it as high as $1,300, Sin [also] said.

Another analyst was quoted, and was also short-term bearish.


The previous optimism, spurred by central-bank purchases, keeps fading. Despite the gloom, gold has passed into stronger hands. The SPDR Gold ETF [GLD] reported that its holdings increased slightly. And, the U.S. Mint's supply of fractional Gold Eagle bullion coins has sold out.

Also of note: even at today's more modest prices, the Indian central bank is still up on the 200 tons it bought. According to a report webbed at the time, the central bank's average buy price was $1,045/oz.