COMEX gold futures held mostly steady on February 5 as the bearish sentiment that swept broader markets on February 2 continued into this week, wiping out the January gains in equities.
Gold for April delivery, the active month, closed 80 cents/oz lower at $1,336.60/oz after slipping from the $1,340-$1,341/oz range in late London/early New York trading.
April gold reached the $1,340-$1,341/oz range following a modest rally in early London trading as major European equity indexes sold off nearly 1.5%.
The Dow Jones industrial average saw volatile trading early in the morning but then went into freefall in the afternoon, falling more than 1,500 points, or about 5.85%, before recovering somewhat.
The Dow ended down 1,178.41 points, or 4.62%, at 24,342.55.
Analysts attributed the selloff to systems-based technical selling when the Dow and the S&P 500 broke below their respective 50-day moving averages following huge gains in January.
The dollar strengthened against the euro, but only marginally to the lower $1.24 region.
Senior trader Sean Lusk of Chicago commodities brokerage Walsh Trading said gold was holding above $1,330/oz because of offsetting buying and selling interest.
"I don't think gold players know what to do. You've got a bullish case to be made and a bearish one," Lusk said.
He noted that gold was actually rising alongside equities and energy commodities in January, helped by a weaker dollar.
"Now the dollar is starting to show some life because, with all this [employment] data, we're starting to see a little inflation, and the likelihood of more rate hikes kicking in," Lusk said.
As speculative funds were selling out of their equities positions, other investors came in to buy gold based on a sizeable rise in the CBOE Volatility Index, Lusk added.
April gold was up $4/oz in afterhours, electronic trading as New York Stock Exchange floor trading closed.
Key support for gold remains at $1,323/oz, Lusk said. A close below that puts the next support levels just above $1,300/oz and $1,282/oz, he said.
COMEX silver for March delivery slipped $0.038/oz to close at $16.671/oz hitting strong resistance in late London/early New York trading near $16.850/oz.
NYMEX platinum for April delivery closed $3.90/oz lower at $995.50/oz after easing back from intraday highs near $1,000/oz.
NYMEX palladium sold off sharply in overnight Asia trading and traded between $1,027/oz and $1,037/oz before ending $12/oz lower at $1,032.95/oz.
