BULLION LATEST 10/11: Gold prices slip amid concerns of weaker demand

The spot gold price was recently quoted at $1,284.70-1,285.15 per oz as of 05:40am London time, down $0.85 from the previous trading day’s close. Trade has ranged from $1,284.15-1,287.15 so far today.

• The third quarter saw a 9% year-on-year drop in gold demand to 915 tonnes. Year-to-date demand was similarly weak, down by 12% on an annual basis, according to latest World Gold Council (WGC) report.
• Exchange-traded funds had another quarter of positive inflows, but – at 18.9 tonnes – they fell far short of the 144.3 tonnes influx in the third quarter of 2016.
• “A softer quarter in the jewellery sector (-3%) accounted for 17 tonnes of the year-on-year decline. Demand from other sectors firmed: central banks bought a healthy 111 tonnes of gold (+25% year on year) while bar and coin investment strengthened by 17% (to 222.3 tonnes), albeit from a low base,” WGC said.
• However, political uncertainty in the US kept a floor under gold prices, according to ANZ.
• “News that the Republican tax plan involved cuts being delayed until 2019 raised the ire of investors,” ANZ.
• US Senate Republicans unveiled a tax plan on Thursday that differed from the House of Representatives’ version. While the bill also called for the corporate tax rate to be cut to 20% from 35%, that change would likely only come into effect in 2019.
• The disappointment with the US tax bill has seen the dollar weaken – the dollar index was down by 0.02% at 94.51 as of 04:52am London time – the index had reached a high of 95.15 on Tuesday, a level it last reached on October 27.

Silver, PGMs rise

• In the other precious metals, the spot silver price increased $0.035 to $17.015-17.035 per oz. Platinum rose $2 to $934-939 per oz while palladium dropped $2 to $1,006-1,013 per oz.
• On the Shanghai Futures Exchange, gold for December delivery was recently at 276.75 yuan ($41.70) per gram, and the December silver was at 3,881 yuan per kg.

Currency moves and data releases

• In other commodities, the Brent crude oil spot price dipped $0.03 to $63.76 per barrel and the Texas light sweet crude oil spot price was down $0.02 at $57 per barrel.
• In equities, the Shanghai Composite index was 0.05% lower at 3426.22.
• The economic agenda is light today with industrial production data out across Europe and the United Kingdom, with the UK’s manufacturing production and goods trade balance also due.