Expert Analysis for Gold and Silver Futures Trading

Expert Analysis for Gold and Silver Futures Trading       Gold prices fell to a near one-week low on Monday, briefly dropping below $1,000 an ounce, as a dollar rally and record speculative positioning in the New York gold futures market prompted profit taking. Silver fell more than gold as it lost over 1 percent.

Data from the U. S. Commodities Futures Trading Commission showed speculators held a record net long position in the U. S. gold futures market for the week ended Sept. 15. The noncommercial net long position in gold futures on the COMEX division of the New York Mercantile Exchange stood at an all-time high of 235,647 lots.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,101.735 tonnes as of Sept 21, up from 1,086.479 tonnes from the previous day.

The dollar rose broadly, extending its pullback from a one-year low against the euro. Gold and the U. S. currency often move in opposite directions as bullion is used by investors as a currency hedge.

International Monetary Fund member countries formally endorsed a plan for strictly limited sales of 403.3 tonnes of gold from its stockpile but the IMF said sales would be done in a way that did not disrupt gold markets.

On Monday, Market News International reported that China was considering buying gold being offered for sale by the IMF, citing two unnamed government sources, but the report could not be confirmed and traders said it had little lasting impact on the market.

Peru's production of gold and silver rose, the mining ministry said on Monday. Peru, a leading global metals exporter, is the world's top producer of silver and ranks sixth in gold.

Gold may trade in a very tight range above $1000 per ounce. The news of China showing interest in buying gold from IMF may lend some support to prices. We expect silver to hold on to yesterday’s levels in line with gold.