Gold price edges higher, seasonal Indian demand supports

Gold edged higher on Thursday, October 27 in London in morning trading, with improving physical demand from India ahead of the country’s festival season providing some support.

The spot gold price was recently quoted at $1,268.15/1,268.45 per oz, up $2.55 on Wednesday’s close. Trade has ranged from $1,265.15 to $1,269.65 so far.

Two important religious Hindi festivals – Dhanteras and Diwali – will be celebrated in India from tomorrow. These are considered auspicious times to give gold as a gift.

“Precious metals prices are still consolidating after the early-October sell-off. They have started to edge higher in recent days – given the stronger dollar, that is quite an achievement,” Metal Bulletin analyst William Adams said.

“There does not seem to be as much buying interest in the precious metals as there has been in the base metals. A stronger economic outlook may well mean less demand for safe-haven assets but we would expect the more industrial precious metals to do relatively better than gold in this climate,” he added.

Some selling in gold exchange-traded funds (ETFs) has emerged in recent days – holdings in the funds followed by Metal Bulletin were down 12 tonnes on Wednesday, October 26, and now stand at 2,154 tonnes, down from a high this year of 2,174 tonnes.

In the other precious metals, spot silver was recently quoted at $17.645/17.675 per oz, unchanged from the previous close. Platinum climbed $6.50 to $961/966 per oz and palladium edged $2 higher to $618/625 per oz.

(Editing by Mark Shaw)

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