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

Gold prices edged lower during trading on Friday November 10 amid concerns of dwindling demand, but losses were limited as political uncertainty in the United States supported investors’ appetite for haven assets.

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.