by David Levenstein:
"After failing to break above the $1800 an ounce level, gold prices came under some selling-pressure last week to trade lower and off its recent highs. The price of the yellow metal closed out the week at $1754.30 an ounce down 2% from last weeks’ high as the US dollar gained against a basket of other major currencies.
"On Monday, the price of gold fell by another 1% to $1,727.50 an ounce, the lowest level since September 13. The price of spot came under some selling pressure almost as soon as the US session on Comex began. Prices fell by around $20 an ounce in the first two hours of trading on Comex, to make an intra-day low of $1727.50 an ounce. But, as we all know, the prices traded on the US futures markets do not really reflect the real situation in the gold markets as the bullion banks are allowed to sell as many paper contracts as they wish thus creating an artificial supply scenario. And, while the CFTC do not see the need the need for position limits in precious metals, they recently fined JPMorgan Chase Bank $600,000 as it violated cotton futures position limits. According to the CFTC, the bank's positions in cotton futures traded on the Intercontinental Exchange U.S. exceeded limits on several days between September 16 and October 5, 2010.
"Frankly, as an investor I don’t pay much attention to these price dips as nothing has changed in the fundamentals pushing gold prices higher. ..."
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