BULLION LATEST 26/10: Gold prices gain on weaker dollar, equity sell-off

The spot gold price rose during Asian morning trading on Thursday October 26 amid a weaker dollar and equity market sell-off, while market participants have turned their attention to the European Central Bank’s (ECB) monetary policy meeting later today.

The spot gold price was quoted at $1,280.20-1,280.50 per oz as of 05:08 BST, up $1.45 from the previous session’s close. Trade has ranged from $1,278.45-1,281.15 so far today.

  • “The fall in equity markets helped turn around a sell-off in the gold market, as investors pushed back into safe-haven assets…The subsequent fall in the US dollar then helped improve investor demand for gold,” ANZ Research said on Thursday.
  • After hitting a record high on Tuesday, the Dow Jones Industrial Average reversed part of its gains to close 0.48% or 112 points lower – its biggest one-day fall – at 23,329.46 on Wednesday following disappointing corporate earnings reports
  • The ECB is set to announce its minimum bid rate later with a press conference by its president Mario Draghi to follow. Market observers are expecting an announcement on the tapering of quantitative easing.
  • The ECB is likely to extend its bond buying program possibly by nine months and reduce the pace of monthly purchases to €20-30 billion ($24-35 billion) starting in January 2018, Credit Suisse said.
  • “Above all, the market will look for hints on whether the scheme will remain open-ended and for any strengthening of the forward guidance on policy rates,” it added.

Silver, PGMs

  • In the other precious metals, the spot silver price rose $0.045 to $16.98-17.02 per oz. Platinum increased $3 to $924-929 per oz and palladium gained $7 to $966-971 per oz.
  • On the Shanghai Futures Exchange, gold for December delivery was recently at 275.50 yuan ($41.48) per gram, and the December silver was at 3,880 yuan per kg.

Currency moves and data releases

  • The dollar index fell 0.11% to 93.53 as of 05:07 BST, the low of 93.5 during the day was the lowest since October 20. The index has eased after rising as high as 94.02 on Monday, the highest since October 6.
  • In other commodities, the Brent crude oil spot price rose 0.05% to $58.37 per barrel as of 04:25 BST.
  • In equities, the benchmark Shanghai Composite Index rose 0.46% to 3,412.45.
  • In US data on Wednesday, new home sales hit 667,000 in September; house prices rose 0.7% in August, beating expected growth of 0.4%; while durable goods orders came in at 2.2% in September.
  • In EU data, the German ifo business climate came in at 116.7 for October, up from 115.3 in the previous month.
  • Economic data due later today includes US unemployment claims and pending home sales, while the ECB is set to announce its minimum bid rate later with a press conference by ECB president Mario Draghi to follow.