Gold Futures Used as Hedge Now More Likely

Two years (and $750 per ounce) after gold futures has peaked in price, gold experts are warming-up to hedging the bullion itself after a four-year hiatus.  The new chairman of a major gold selling operation says the practice “now makes sense and is worth considering.”

For the first year in thirteen, gold futures are experiencing its first losing year – declining 27% so far this year.  This interruption in gold prices has eroded gold producers earnings and has reportedly prompted them to take $26B of write downs this year alone.

Economic data is sure to keep gold prices  volatile, but the longer term trend still seems to be in place and further downside should be expected,” says Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the current gold futures situation.

The trend for gold futures is down with no bottom in sight.  If gold futures can manage to trade down to $1,180 per ounce, we could see an acceleration to the downside.

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