The bullion exchange-traded funds, which hold inventories of the metal, were mixed in recent action, with streetTracks Gold Shares ( - - ) up 0.1% and iShares Comex Gold Trust ( - - ) hovering around the unchanged mark. At about the same time Comex floor trading ended Tuesday, a retreat by the major U.
S. averages accelerated on concerns that the performance of dicey housing loans may spill over to the broader economy. Stocks dropped roughly 2% in New York.
"We suspect longs have liquidated gold positions to pay for losses in other markets," says Robin Bhar, a metals strategist at UBS in London. "It's another period of risk-aversion that we saw at the beginning of March." Traders should look for a further dip to around $625, at which point jewelry fabricators will likely provide meaningful price support, says Bhar.
In other news, the Commerce Department reported better-than-expected trade data in the fourth quarter of 2006. The statistics show that imports of goods and services outstripped exports at a softer rate than the consensus forecast. Contracts for April delivery of bullion close down 90 cents at $649.
40 an ounce. Futures edge down $1.70 an ounce.
Bullion's contracts for April delivery slip $4.10 to $651.40 an ounce.
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