BULLION LATEST 16/10: Gold stays above $1,300 per oz but dollar rebound checks gains

The spot gold price remained above $1,300 per oz during Asian morning trading on Monday October 16, but gains were checked by a rebound in the dollar.

The spot gold price was quoted at $1,301.90-1302.20 per oz, down by $1.70 as of 04:24 BST. Trade has ranged from $1,301.15-1,304.58 so far today. The price had risen as high as $1,304.80 on Friday, the highest since September 26.

  • “Gold prices pushed back above $1,300 per oz as weaker-than-expected economic data saw investors reduce their probability of a rate hike by the [US Federal Reserve],” ANZ Research said on Monday.
  • The US consumer price index (CPI) and core CPI for last month both disappointed at 0.5% and 0.1%, respectively.
  • Stubbornly low inflation in the USA has been a hurdle for the US Federal Open Market Committee (FOMC) members to raise interest rates at a faster pace, though Federal Reserve chairwoman Janet Yellen noted over the weekend that “with the ongoing strengthening of labour markets, I expect inflation to move higher next year”.
  • Gold is also seeing support from geopolitical tensions as US president Donald Trump decertified its nuclear deal with Iran while North Korea is reported to be preparing for a missile test.
  • “Geopolitical risk does not abate this week with the Japanese elections [scheduled for October 22], the ongoing tensions with Iran and North Korea and finally the China National Congress starting on Wednesday. This should all combine to ensure that gold maintains a safe haven tone this week,” Jeffrey Halley, senior market analyst at Oanda, said.

Silver, PGMs

  • In the other precious metals, the spot silver price was down by $0.02 to $17.34-17.36 per oz.
  • Platinum was $2 lower at $939-944 per oz, while palladium increased $7 to $992-$997 per oz.
  • On the Shanghai Futures Exchange, gold for December delivery was recently at 278.05 yuan ($42.25) per gram, and the December silver was quoted at 3,921 yuan per kg.

Currency moves and data releases

  • The dollar index rebounded 0.13% to 93.18 as of 04:45 BST on Monday. The index had fallen as low as 92.75 on October 13, the lowest since September 26.
  • In other commodities, the Brent crude oil spot price was up 1.11% to $57.80 per barrel at 04:46 BST.
  • In equities, the Shanghai Composite Index was recently down 0.11% to 3,386.78.
  • In Chinese data, the September CPI was in line with its projected reading at 1.6%, while the producer price index for last month was above expectations at 6.9%.
  • In US data on Friday, retail sales in September grew 1.6% in September, slightly below the consensus of 1.7%. Core retail sales over the same period stood at 1.0%.
  • It is a thin day for economic data with mainly the US Empire State manufacturing index of note
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