gold prices are trading near their April 6 lows and hovering just above support at $865 per ounce.
Commodity strategists said part of the decline in gold prices is due to the lack of investor interest, and the declines could become more pronounced as investors continue to unwind their positions.
They pointed out that on Thursday SPDR, the largest physically-backed ETF, recorded its first outflow since April 3 and its largest outflow since October 2008.
“In our view, further net redemptions pose the largest downside risk to prices given that the rally at the start of year was led by the tremendous strength in investment demand,” they said.
Mike Glaser, futures broker at LaSalle Futures, said the recent strength in the U.S. dollar is also weighing on gold prices.
Jimmy Tintle, futures broker at Transworld Futurs.com, said on a technical level a close below $875 is a very bearish sign for the short-term. With gold closing the week below that level, he said it could lead to a test of $825.
Most recently, spot gold is trading down $7.30 to $868.40 USD. In Canadian dollars, gold is down $1.40 to C$1055.90. Silver contracts at the CBOT are down $0.43 to $11.82.
WTI Crude oil is up $0.30 to $50.28 while ICE crude oil is trading up $0.35 to $53.41.
Meanwhile, ICE RBOB gasoline futures are up $2.75 to $147.43 and Globex natural gas is down $0.02 to $1.30. Heating oil at the ICE is up $0.22 to $144.60.
Bloomberg’s index for base metals is up 1.69 points to 141.99. Wheat futures at the CBOT are down $1.75 to $534.75.
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