BULLION LATEST 07/11: Spot gold price flat on lack of catalysts

Gold was relatively flat during Asian morning trading on Tuesday November 7 on a lack of catalyst, though market observers see the yellow metal remaining under pressure on a strong dollar and expectations of an increase in interest rates in the United States in December.

The spot gold price was quoted at $1,279.10-1,279.50 per oz at 12:28pm Shanghai time, down $0.55 from the previous trading day’s close. Trade has ranged from $1,278.55-1,280.78 so far for the day.

  • “The short- and medium-term trend for the gold price remains weak on expectations of a December US rate increase and the rise in the US dollar,” China’s Ruida Futures said late on Monday.
  • Uncertainties in the market have also decreased after US president Donald Trump named Jerome Powell as the next Federal Reserve Chair, the futures broker added.
  • Markets are increasingly confident that the Fed will raise US interest rates next month, which has weighed on the precious metals complex.
  • Indeed, 96.7% of market participants expect the Fed to raise rates to between 1.25% and 1.5% in December, according to the CME Group’s FedWatch tool.
  • The increased confidence follows the release of US economic data on Friday which showed job growth in the country accelerated last month and the services sector grew at its strongest rate since August 2005.

Silver, PGMs

  • In the other precious metals, the spot silver price fell $0.05 to $17.105-17.135 per oz. Platinum was flat at $927-932 per oz while palladium rose $1 to $996-1,001 per oz.
  • On the Shanghai Futures Exchange, gold for December delivery was recently quoted at 274.80 yuan ($41.43) per gram, and the December silver was at 3,883 yuan per kg.

Currency moves and data releases

  • The dollar index was down 0.01% at 94.72 as of 11:34am Shanghai time. The index had climbed as high as 95.08 on Monday, the highest since October 27.
  • In other commodities, the Brent crude oil spot price increased 0.18% to $64.14 per barrel as of 11:39am Shanghai time.
  • In equities, the Shanghai Composite Index rose 0.58% to 3,407.83 at 11:30am Shanghai time.
  • In European Union data from Monday, the producer price index was recorded at 0.6% for September, up from 0.3% in the previous month, and the Sentix investor confidence was at 34.0 for October, up from 29.7 previously. German factory orders increased 1% in September, against a forecast 1% decline.
  • Key economic due later today includes the IBD/TIPP economic optimism and Jolts job openings from the US.
  • In addition, European Central Bank (ECB) president Mario Draghi is due to deliver opening remarks at the ECB Forum in Germany, while US Federal Reserve chair Janet Yellen is speaking in Washington DC.
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