Gold Trades Above 2014’s Low Before China Returns
New York (Oct 7) Gold traded little changed above this year’s low in New York as the dollar held a decline from a four-year high and investors awaited Asian buyers to return from a holiday. Platinum rose from a five-year low.
Bullion reached the lowest since Dec. 31 yesterday, before rebounding to end the day up 1.2 percent, the most since August. The Bloomberg Dollar Spot Index was little changed today after dropping 0.9 percent yesterday.
Bullion erased gains for the year last week as signs the U.S. economy is improving added to the case for policy makers to raise interest rates, helping send the dollar gauge to the highest level since 2010 on Oct. 3. Traders will be “closely watching” physical demand in the next few days as Chinese and Indian consumers return from holidays, UBS AG wrote in a report today. The nations are the biggest users of the metal.
“These were much needed moves from a marketplace that has been under siege almost continuously for the last month,” David Govett, head of precious metals at Marex Spectron Group in London, said today in a report, referring to yesterday’s gain. “We may have seen the worst of the downside moves for the time being, as long as the dollar doesn’t decide to go stratospheric again.”
Gold for December delivery lost 0.1 percent to $1,205.60 an ounce on the Comex in New York by 7:43 a.m. It slipped to $1,183.30 yesterday, the lowest since Dec. 31, before rebounding. Gold for immediate delivery fell 0.2 percent to $1,205.47.
Trading Volume
Futures trading volume was 26 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg show. Markets reopen tomorrow in China after the Golden Week holiday.
Better than expected U.S. employment data on Oct. 3 stoked expectations the Federal Reserve will start increasing borrowing costs. Rising interest rates reduce gold’s allure because the metal generally only offers investors returns through price gains, while a stronger dollar typically cuts demand for a store of value.
Silver for December delivery added 0.4 percent to $17.30 an ounce on the Comex in New York, after gaining as much as 2.3 percent to $17.625 earlier today, the highest price since Sept. 29. It reached the lowest in more than four years last week.
Palladium futures increased 0.7 percent to $771.65 an ounce. It dropped to $735 yesterday, the lowest since February. Platinum futures rose 0.8 percent to $1,258.70 an ounce in New York, after slumping to $1,186.50 yesterday, the lowest level since July 2009.
Russia and South Africa, the largest suppliers of the metal, plan to meet next month to discuss cooperation to support prices.
Source: Bloomberg
