Gold price under pressure, dollar strength continues to weigh

Gold remained pressure from a stronger dollar in morning trading in London on Tuesday November 15 – the currency has powered higher after US president-elect Donald Trump pledged to spend his way to growth. 

The spot gold price was recently quoted at $1,223.35/1,223.65 per oz, down 20 cents on Monday’s close. Trade has ranged from $1,222.55 to $1,231.50 so far. Yesterday the metal fell to its lowest since June.

“Support for the metal sits broadly around $1,210, while below this the late May low around $1,200 should see strong interest. On the topside $1,230 remains mildly restrictive, while $1,240 will see solid offers,” MKS said in a note.

The dollar index surged to 100.22 on Monday, its highest since December 3, 2015. It was recently quoted at a still-strong 99.67.

Markets see a 92% chance of an interest-rate rise next month given Trump’s massive infrastructure investment plans that should stimulate the economy, broker Triland noted.

“Later this week we expect to see more signals on the Fed’s decision next month, with [chair Janet] Yellen’s testimony giving gold a clearer direction in the short term,” the broker added.

In the other precious metals, the spot silver price was unchanged at $17.020/17.040 per oz. Platinum at $940/945 per oz was $13 higher and palladium at $704/709 per oz was up $12.

Johnson Matthey revised its market balance estimates for platinum and palladium on Monday – it cut its anticipated platinum supply deficit in 2016 by more than half to 422,000 oz and its expected palladium deficit by nearly a quarter to 651,000 oz.

Whereas Johnson Matthey also expects the palladium market to show a supply deficit next year, the platinum market looks set to return to a surplus for the first time in six years, Commerzbank said.

(Editing by Mark Shaw)

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