Gold price recovers slightly as risk-on eases but strong dollar weighs

Gold edged higher on the morning of Wednesday November 16 in London, reflecting a slight easing in risk-on sentiment.

The spot gold price was recently quoted at $1,227.95/1,228.25 per oz, up $1.15 on Tuesday’s close. Trade has ranged from $1,225.50 to $1,233.10 so far.

“The market stopped falling, but the ‘dead cat bounce’ seen on Tuesday could hardly be described as an enthusiastic rally,” HSBC analyst James Steel said. “Gold is still sensitive to risk-on trading and will likely fall on any significant resurgence of risk on investor sentiment. The key to gold direction is in the financial markets.”

A stronger dollar – against a basket of major global currencies, it was last at 100.22, up 0.06% – and expectations that the US Federal Reserve will lift interest rates in December continue to weigh on the metal.

According to the CME Group’s FedWatch tool, the likelihood that the US central bank will raise rates next month – for the first time in a year – is now 94%.

But the physical bullion market has picked up, MKS noted – according to reports in India, imports of gold have jumped to $1 billion over the past six days after the government’s surprise decision to abolish high-value bank notes last week, which “has seen consumers rushing to convert cash to gold”, the broker said.

In the other precious metals, the spot silver price was unchanged at $17.045/17.065 per oz. Platinum fell $5 to $931/941 per oz and palladium was $6 lower at $697/703 per oz.

(Editing by Mark Shaw)

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