BULLION LATEST 17/10: Firmer dollar weighs on gold prices

The spot gold price was recently quoted at $1,293.7-1,294 per oz as of 04:03 BST, down $1.75 on the previous day’s close. Trade has ranged from $1,292.40-1,296 so far today.

• The dollar index has reversed the losses it saw at the end of last week – the index was recently up 0.2% at 93.32 as of 04:03 BST.
• The dollar had slipped to a low of 92.75 on October 13, its lower since September 26, after the USA’s September consumer price index (CPI) was lower than anticipating, lowering expectations of a US interest rates rise in December.
• However, positive data released on Monday has been more supportive to the currency, putting pressure on gold prices.
• In US data on Monday, the Empire State manufacturing index came in at 30.2, a big increase from an expected print of 20.3.
• “Gold prices fell on signs of resilience in the US economy, supporting the case for continued rate hikes,” ANZ Research noted.
• “Manufacturing in [New York] State expanded much better than expected in October. This helped push the USD higher, thus weighing on investor appetite for the precious metal,” it added.
• Meanwhile, US Federal Reserve chair Janet Yellen continues to view the slowdown in inflation as temporary and has suggested further acceleration of consumer prices, which indicates a high possibility for another interest rate increase in December.

Silver, PGMs

• In the other precious metals, the spot silver price was flat $17.195-17.235 per oz. Platinum rose $4 to $930-935 per oz and palladium gained $6 to $976-981 per oz.
• On the Shanghai Futures Exchange, gold for December delivery was recently at 277.35 yuan ($42.10) per gram, and the December silver was at 3,912 yuan per kg.

Currency moves and data releases

• The dollar index was up 0.02% at 93.32 as of 04:03 BST.
• In other commodities, the Brent crude oil spot price dropped 0.15% to $57.8 per barrel while the Texas light sweet crude oil spot price was down 0.14% to $51.77
• In data on Monday, China’s producer price index for September at 6.9% was up from 6.3% previously, also beating the previous forecast of 6.4%, while Japanese revised industrial production was at 2%, down slightly from the initial reading of 2.1%.
• Today’s economic agenda is busy with UK data that includes consumer prices, producer prices, retail prices and house prices, while the EU has consumer prices and the German ZEW economic sentiment index. There is also a host of US data including import prices, capacity utilisation rate, industrial production, and the NAHB housing market index.
• In addition, Bank of England governor Mark Carney and US Federal Open Market Committee member Patrick Harker are speaking.