BULLION LATEST 25/10: Positive economic data, equities market sink gold

The spot gold price headed lower during Asian morning trading on Wednesday October 25, as positive economic data and strength in equities market reduced demand for the haven asset.

The spot gold price was quoted at $1,272.90-1,273.20 per oz as of 05:03 BST, down $3.45 from the previous session’s close. Trade has ranged from $1,272.55-1,277.05 so far today – the lower end of the range is at the lowest since October 6.

  • “The positivity in the economic backdrop weighed on the gold market, with investor demand falling as equity markets pushed higher. This risk-on tone forced the gold price to fall below its 100-day moving average, a possible precursor to further falls,” ANZ Research said on Wednesday.
  • In data on Tuesday, October flash manufacturing purchasing managers’ index (PMI) readings from the USA and Europe surprised on the upside. The number was at 54.5 in the USA, above the forecast of 53.3, while the print for Europe was at 58.6, above the expected 57.9.
  • The Dow Jones Industrial Average closed 0.72% higher to reach 23,441.76 on Tuesday boosted by better-than-expect quarterly company results.

Silver, PGMs
  • In the other precious metals, the spot silver price fell $0.045 to $16.865-16.905 per oz. Platinum eased $1 to $918-923 per oz and palladium gained $1 to $962-967 per oz.
  • On the Shanghai Futures Exchange, gold for December delivery was recently at 274.90 yuan ($41.59) per gram, and the December silver was at 3,872 yuan per kg.

Currency moves and data releases
  • The dollar index was up 0.05% to 93.99 as of 05:03 BST. The index had risen as high as 94.02 on Monday, the highest since October 6.
  • In other commodities, the Brent crude oil spot price fell 0.23% to $58.38 per barrel at 05:05 BST.
  • In equities, the benchmark Shanghai Composite Index rose 0.12% to 3,392.29.
  • In data on Tuesday, October flash manufacturing purchasing managers’ index (PMI) readings from the USA and Europe surprised on the upside. The number was at 54.5 in the USA, above the forecast of 53.3, while the print for Europe was at 58.6, above the expected 57.9.
  • The US Richmond manufacturing index disappointed at 12, below the forecast of 17. In China, the CB leading index month over month in September increased 1%, down from 1.3% in August.
  • Economic data due later today includes the German Ifo business climate, UK preliminary gross domestic product and US data including core durable goods orders, durable goods orders, new home sales and crude oil inventories.

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