BULLION LATEST 23/11: Gold under pressure as investors lock in profits

The spot gold price was quoted at $1289.85-1290.15 per oz, down by $0.75 as of 12:07pm Shanghai time. Trade has ranged from $1289.55-1291.70 so far today.

• Gold had surged higher on Wednesday, buoyed by the US Federal Reserve’s (Fed) concerns about persistent low inflation which saw the dollar slide.
• The dollar index fell to a low of 93.21 on Wednesday, its lowest in more than a month.
• “Investors pushed aside signs that a [US interest] rate hike is imminent in the short term; instead viewing comments about low inflation as reducing the number of anticipated rate hikes in 2018,” ANZ Research noted on Thursday.
• The minutes from the Fed’s November meeting said that some officials were reluctant to vote for additional rate increases until they are convinced that inflation is indeed gaining strength.
• These officials “indicated that their decision about whether to increase the target range in the near term would depend importantly on whether the upcoming economic data boosted their confidence that inflation was headed toward the committee’s objective.”
• However, gold’s push higher has attracted some profit-taking this morning.
• “This morning in Asia, gold has given up some of those gains [from the previous session]…as profit-taking sellers appeared,” Jeffrey Halley, senior market analyst at Oanda, said on Thursday.
• “We would expect trading over the coming two days to be muted with the [United States] away [for the Thanksgiving holiday]. As has been the recent case, gold’s short-term direction will continue to be dictated by the big dollar rather than any specific gold-based event risk,” Halley added.

Silver, PGMs

• In the other precious metals, the spot silver price was up by $0.025 to $17.090-17.110 per oz.
• Platinum was flat at $933-938 per oz, while palladium increased $2 to $1,003-$1,007 per oz.
• On the Shanghai Futures Exchange, gold for June delivery was at 280.10 yuan ($42.30) per gram, and the December silver was 3,968 yuan per kg.

Currency moves and data releases

• The dollar index was down by 0.12% at 93.19 as of 10:44am Shanghai time. The index had earlier reached a low of 93.16, which was the lowest reading since October 20.
• In other commodities, the Brent crude oil spot price was down by 0.16% to $63.14 per barrel as of 10:55am Shanghai time, and the Texas light sweet crude oil spot price decreased by 0.17% to $57.85.
• In equities, the Shanghai Composite was down 0.73% to 3,405.35.
• In US data on Wednesday, unemployment claims came in at 239,000, below the expected 241,000 and down from the previous month’s 252,000. Meanwhile, core durable goods fell 1.2% in October against an expected 0.3% increase.
• The economic agenda is busy today with flash manufacturing and services purchasing managers index (PMI) data out across Europe. The second estimate for the United Kingdom’s third-quarter gross domestic product (GDP) is also due as well as the country’s preliminary business investment and CBI realized sales.
• In addition, the European Central Bank’s October monetary policy meeting accounts will be released at 12:30pm London time.