Gold Continues Bearish Ways

By Traders Huddle | May 12, 2012 AAA

New York, May 11th (TradersHuddle.com) - For those that didn't get the memo, down appears to be the path of least resistance for gold right now and that fact was reiterated on Friday as the yellow metal got back to its losing ways. Comex gold for June delivery slid 11.50, or 0.7%, to settle at $1,584 an ounce. That's the lowest closing price of the year for gold and the precious metal has been under siege due a stronger U.S. dollar. The PowerShares DB US Dollar Index Bullish (NYSE: UUP) closed higher by more than 0.1% on light volume.

Gold traded as low as $1,572 an ounce earlier Friday and the bearishness culminated with a loss of nearly 4% for the week. That's gold's second straight weekly loss. The U.S. dollar index has closed higher for 10 straight trading sessions. Not even some decent economic data points could help gold escape the clutches of its risk on status.

In economic news, the Thomson Reuters/University of Michigan's preliminary May reading of consumer sentiment jumped to 77.8 from 76.4 in April. That's the highest level since January and well above the reading of 76.2 economists expected.

The producer price index for April fell 0.2%, but excluding gas and food prices, the PPI rose 0.2%, according to the Labor Department. Economists expected the core number to be flat with a 0.2% increase excluding and food and energy costs.

Gold ETFs are in trouble as well. The SPDR Gold Shares (NYSE: GLD) and the iShares Gold Trust (NYSE: IAU) each lost three-quarters of a percent today and both are down 3.7% in the past week. The other precious metals are offering no shelter from the storm. The iShares Silver Trust (NYSE: SLV) has lost almost 11% in the past month and took its first peak below $28 today since January. With little reason to buy gold, there's almost no reason to embrace silver. SLV's assets under management have almost been cut in half over the past year.

A 1.5% loss for the ETFS Physical Platinum Shares (NYSE: PPLT) puts this ETF in grave danger of losing another $10-$15 and resting its 52-week low. The ETFS Physical Palladium Shares (NYSE: PALL) tumbled 2.2% and it looks like it's matter of when, not if, that the fund retests its own 52-week low.

Just forget about the miners. The Global X Silver Miners ETF (NYSE: SIL) briefly traded above $19 only to close below there and down for the day. The Market Vectors Gold Miners ETF (NYSE: GDX) lost another 1.6% while the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) plunged 2.4%. Earlier this week, GDXJ printed a new all-time low.

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