Newmont triggers pullback

25 ott

Gold hit a fresh all-time high on Wednesday morning, just a few dollars short of $2,760. After that, it fell steadily and later that evening it came close to testing $2,700. But buyers came in and took gold back up towards $2,750 yesterday. Unfortunately, that was as good as it got, and gold has come under selling pressure again this morning. The trigger for the decline was the release of some grim quarterly results from Newmont, the world’s biggest gold producer. The stock has nosedived, falling from just under $60 on Tuesday’s close, to just over $49 last night, near the day’s low. Newmont is the major constituent in some widely traded gold mining ETFs, so what happens to the stock matters to the gold market, and even the precious metals complex in general. Traders will be keeping a close eye on how it will end tonight ahead of the weekend. Otherwise, the gold chart looks ok so far. If prices can continue to consolidate above $2,700, then technically there’s relatively little damage. But a significant and protracted break below here could spell more pain for the bulls. Silver’s decline has been far more dramatic, so no change there then. From its twelve year high of $34.87 on Tuesday to this morning’s low, silver has lost 5%. If it can find support around $33 and stage a sharp bounce-back, then there will be little overall damage. But, as with gold, a significant and protracted break below here could be the precursor to a larger pullback.