US GOLD OPEN - Comex trends lower on easing geopolitical tensions
ORLANDO-FLORIDA (Sept 10) Gold slid in the US on Tuesday when safe-have demand dissipated after Syria accepted a Russia-brokered deal to place its chemical weapons stockpiles under international control.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was last down $22.40 or 1.6 percent at $1,364.30 per ounce. Trade has ranged from $1,362.20 to $1,391.40.
“The gold price has come under pressure in response to the latest signs of de-escalation in the Syrian crisis and has slipped below $1,380 this morning,” Commerzbank said, noting that the price fall is also being accompanied by significant outflows from gold exchange-traded funds (ETFs) for the first time in a month. Holdings in the ETFs tracked by FastMarkets declined a net 2.75 tonnes yesterday.
“Because the gold price has failed to reach the $1,400 mark, there is an increased risk that short-term-oriented financial investors will take profits and discard the long positions they recently acquired,” the broker added.
The reduced geopolitical tensions are also clearly evident in the energy markets, with light sweet crude (WTI) oil futures on the Nymex falling $2.21 to $107.30 per barrel.
In the US, the Federal Open Market Committee (FOMC) meets next week, where the unwinding of its quantitative easing programme - worth $85 billion per month - is likely to be the main topic of debate. Accommodative measures from the US central bank are supportive of gold because extra liquidity tends to debase the dollar and create future inflationary risks.
John Williams, the president of the Federal Reserve Bank of San Francisco, said yesterday that he will attend the meeting with an open mind and has not yet decided how he will vote at the meeting.
“It's really important not to overreact, or put too much weight, on one month's data, whether strong or weak. We are continuing to get closer to this marker of substantial improvement which we set last year,” Williams conceded.
Meanwhile, the yellow metal is finding some modest support from India, where the rupee has strengthened sharply against the dollar in the past two days, rising to 64.3 this morning from 68 late last week, Dennis Gartman, editor of the Gartman Letter, noted.
“The flight out of the rupee seems to have run its course, coextensive with the introduction of the new governor of the reserve bank there,” Gartman said.
In the other precious metals, Comex silver for December delivery was down 55.2 cents at $23.165 per ounce. Trade has ranged from $23.120 to $23.820.
Platinum futures for October delivery on the Nymex were down $6.60 at $1,476.40 per ounce, while the most actively traded palladium contract was at $694.05, up $11.05.
