BULLION LATEST 12/01: Gold prices rise after hawkish ECB, soft data sink dollar

The spot gold price was quoted at $1,328.56-1,329.10 per oz as of 12.24pm Shanghai time, up by $6.45 from the previous session’s close. Trade has ranged from $1,322.85-1,329.15 so far today.

• The yellow metal benefited from a weaker dollar following hawkish ECB minutes and disappointing US data overnight.
• The dollar index was down by 0.5% at 91.81 as of 11:57am Shanghai time.
• Earlier in the session, the index had reached a low of 91.69 – its lowest since October 20 when it fell to 91.42.
• “Gold put in another strong showing after the hawkish ECB minutes weighed on USD sentiment,” Stephen Innes with Oanda said on Friday.
• “Indeed, the weaker dollar narrative amidst increased demand for equity market hedges suggests the near-term outlook for gold is glittering,” Innes added.
• “ECB minutes were interpreted on the hawkish side due to a discussion of a “gradual shift” in guidance from “early 2018” – much earlier than had previously been discussed,” ANZ Research said on Friday.
• Disappointing data from the United States added to the dollar’s woes.
• In US data on Thursday, the December producer price index fell 0.1%, against an expected increase of 0.2%, while unemployment claims rose to 261,000 this week, marking the fourth consecutive weekly increase and a more-than-three-month high.
• Later, the market will be keeping a close eye on the US consumer price index (CPI) and retail sales releases, which may have some bearing on the dollar.

Silver, PGMs

• In the other precious metals, the spot silver price rose $0.12 to $17.095-17.115 per oz. Platinum increased $8.5 to $988-993 per oz and palladium gained $6 to $1,088-1,093 per oz.
• On the Shanghai Futures Exchange, gold for June delivery was recently at 281.35 yuan ($43.24) per gram, and the June silver was at 3,886 yuan per kg.

Currency moves and data releases

• The dollar index was down by 0.05% to 91.81 as of 11.57am Shanghai time.
• In other commodities, the Brent crude oil spot price was up by 0.2% to $69.26 per barrel as of 11:10 am Shanghai time.
• In equities, the Shanghai Composite was up by 0.1% to 3428.65 as of 11:30 am Shanghai time.
• Data out already today showed China’s trade balance for December, in dollar-denominated terms, came in at a surplus of $54.7 billion, while the yuan-denominated balance stood at a surplus of 362 billion yuan, both surpassing expected and previous readings.
• Later, US CPI and retail sales releases are of note.
• In addition, German Federal Bank President Jens Weidmann is speaking.
• Looking ahead to the weekend, key Chinese data including new yuan loans and M2 money supply are expected.