BULLION LATEST 28/11: Gold edges lower on dollar recovery

Following a strong performance overnight, the spot gold price inched lower during Asian morning trading on Tuesday November 28 after the dollar staged a slight recovery.

The spot gold price was quoted at $1,293.60-1,293.90 per oz as of 11:18am Shanghai time, down by $0.55 from the previous session’s close. Trade has ranged from $1,293.10-1,296.90 per oz so far today.

  • Gold edged lower during early trading on Tuesday but remained near the six-week high of $1,299.40 per oz reached in the previous session, with a slight recovery in the dollar pressuring the yellow metal’s prices.
  • The dollar index was up by 0.03% to 92.92 as of 11.19am Shanghai time – the index had fallen to as low as 92.50 on Monday, its lowest since September 25.
  • “The US dollar looks to have drawn a little support from tax bill optimism – as well as the Kaplan comments – having earlier in the day gained a small lift from news that US new home sales surged by 6.2% in October against expectations for a fall of 6.3%,” Ray Attrill from National Australia Bank said.
  • “If we wait too long to see actual evidence of inflation, we may get behind the curve and have to subsequently raise rates more rapidly,” Robert Kaplan, Dallas Federal Reserve President and current US Federal Open Market Committee voter, said during a speech on Monday.
  • However, the price consolidation in gold might soon see an end as investor appetite for haven assets has picked up amid a series of political events and re-emerging regional tensions.
  • “A weaker dollar, along with a possible US Senate vote this week on the tax reform bill, saw traders shift some positioning to precious metals,” Jeffrey Halley, senior market analyst at Oanda said.
  • “News that North Korea may be preparing another missile test should see gold remain supported on pullbacks through the Asia session,” Halley added.

Silver, PGMs

  • In the other precious metals, the spot silver price dipped by $0.01 to $17,015-17.055 per oz. Platinum gained $3 to $944-949 per oz and palladium rose by $1 to $1003-1,008 per oz.
  • On the Shanghai Futures Exchange, gold for June delivery was recently at 281.55 yuan ($42.67) per gram, and the June silver was at 3,983 yuan per kg.

Currency moves and data releases

  • The dollar index was up by 0.03% to 92.92 as of 11.19am Shanghai time – the index had fallen to as low as 92.50 on Monday, its lowest since September 25.
  • In other commodities, the Brent crude oil spot price dropped by 0.12% to $63.65 per barrel while the Texas light sweet crude oil spot price was down by 0.21% to $57.73.
  • In equities, the Shanghai Composite was down by 0.3% to 3,312.17.
  • In data on Monday, new home sales in the United States climbed 6.2% to a seasonally adjusted annual rate of 685,000 in October, recording the highest reading in the last ten years.
  • The economic agenda is busy today with German import prices and GfK consumer climate, the United Kingdom’s bank stress test results, Bank of England (BOE) financial stability report and Financial Policy statement and European Union M3 money supply and private loans data.
  • There is also a raft of US data including the goods trade balance, preliminary wholesale inventories, house prices, the Standard & Poor’s/Case-Shiller house price index, CB consumer confidence and the Richmond manufacturing index.
  • In addition, there are a number of officials speaking today including BOE governor Mark Carney, US Federal Reserve chair designate Jerome Powell, US Federal Open Market Committee member William Dudley and US Treasury Secretary Steven Mnuchin.
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