Isra-Mart srl: COMEX gold trades higher as equities weaken

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Comex Gold has hit its highest level in a little more than a week as some safe-haven demand returns and the market maintains technical strength, says Dave Meger, director of metals trading with Vision Financial Markets.

For some time now, gold has tended to move with risk assets such as stocks and other commodities. But that is not the case at the moment. As of 11:02 a.m. EDT, Comex December gold was $36.40 higher to $1,688.70 an ounce with the Dow industrials lower by triple digits.

U.S. consumer confidence was weaker than forecast. Also, a meeting of European finance ministers to discuss debt issues Wednesday was canceled, although European leaders still will have a summit.

“We have not seen the safe-demand element in Gold and it seemed to be trading more correlated with equities (recently). But today, we are seeing more of that safe-haven demand element come back,” Meger says.

“But I think it’s more.” He also cited an improved technical picture and the second wave of a strong seasonal pattern. “We’re certainly seeing adequate demand on dips,” Meger says. December gold peaked at $1,689.80, its strongest level since Oct. 17.