BULLION LATEST 01/12: Gold price ticks up on softer dollar

The spot gold price was quoted at $1,275.4-1,275.7 per oz as of 11.54am Shanghai time, up $0.60 on yesterday’s close. Trade has ranged from $1,274-1,276.85 so far.

• The dollar index was strong overnight, climbing to 93.51 on the back of the news that US Senator John McCain will support the Senate tax bill and the increasing likelihood of an interest rate increase in December.
• The rise in the US currency put pressure on the price of the yellow metal ahead of the start of the Asian trading day.
• “The relatively strong Q3 GDP in the US dented investor demand; compounded by comments from Janet Yellen that it was a brightening picture for the US economy, while downplaying the risk of financial instability,” ANZ Research noted.
• “Excellent US consumption and preliminary GDP data saw the US 10-year bond yield rise to 2.435% overnight, while the passage of the US tax bill making progress through the Senate saw shares spike again. All of this torpedoed gold below the waterline as traders headed to the exit door for better returns elsewhere,” an analyst at Oanda said.
• However, the gold price moved marginally higher following a softening in the dollar index in early Asian trading. The dollar index was at 92.96 on Friday as of 11:54 Shanghai time, down by 0.08% from yesterday’s close.
• “Having closed below its 200-day moving average at 1286.00 on Wednesday, gold tried and failed to test it yesterday before crashing. This is the crucial pivot point that must be regained for bullish traders [to] breathe a little easier,” the analyst at Oanda said.

Silver, PGMs

• In the other precious metals, the spot silver price dipped $0.003 to $16.425-16.450 per oz. Platinum gained $3 to $939-944 per oz and palladium was up $4 at $1,011-1,016 per oz.
• On the Shanghai Futures Exchange, gold for June delivery was recently at 277.80 yuan ($42.02) per gram, and the June silver contract was at 3,863 yuan per kg.

Currency moves and data releases

• The dollar index was at 92.96 on Friday as of 11:54 Shanghai time, down by 0.08% from yesterday’s close.
• In other commodities, the Brent crude oil spot price rose by 0.46% to $62.93 per barrel while the Texas light sweet crude oil spot price gained by 0.38% to $57.57.
• In data released on Thursday, figures out of Europe were mixed: the Eurozone’s November consumer price index (CPI) flash came in at 1.5% versus an expected 1.6% while the core reading missed at 0.9% – 1.0% had been called for. However, the EU’s unemployment rate for October beat expectations with a reading of 8.8% against both a previous and expected reading of 8.9%.
• US data on Thursday was broadly positive with monthly personal spending and income exceeding expectations with prints of 0.3% and 0.4%, respectively. The Chicago purchasing managers’ index (PMI) surprised to the upside with a reading of 63.9, versus an expected print of 62.2. The core PCE index was in line with expectations at 0.2%.
• Data out already today showed China’s Caixin manufacturing PMI surprising to the downside with a print of 50.8 versus an expected 51.2.
• Later we have a host of manufacturing PMI data out from across Europe, the United Kingdom and the United States. Other US data expected later today includes monthly construction spending, ISM manufacturing prices and total vehicle sales.
• In addition, US Federal Open Market Committee members Robert Kaplan and Patrick Harker are speaking.