Gold drifts on lack of market catalyst, more downside seen

The spot gold price drifted in range-bound trading during Asian trading hours on Wednesday December 7 amid a lack of fresh market-driving catalysts.

The spot gold price was recently quoted at $1,169.30/1,169.70 per oz, up just $0.60 on the previous close. Trade has ranged from $1,167.30 to $1,169.90 so far.

Gold continues to look fragile after underperforming last week, Boris Mikanikrezai, a Metal Bulletin Research analyst, said.

“There is a clear reduction in [haven] demand, visible in the fall in [exchange-traded funds] and speculative demand, which is in turn pressurising gold prices lower still. Despite growing political uncertainty, global risk sentiment continues to improve prompting investors to favour risk assets at the expense of [havens] such as gold,” he said.

The spot gold price has been met by fresh buying after dipping to $1,160 per oz, but the downtrend has yet to end, Chris Beauchamp, a market analyst at IG, said.

If the $1,160 per oz holds, a base may form but if it drops below this level, the spot gold price could slip to $1,130 and then $1,110, he added.

Investors have turned more upbeat about global economic growth following the recent spate of positive macroeconomic data from the US, which proves a boon for risk assets like equities.

In US data released on Tuesday, factory orders growth beat the forecast of 2.5% by rising 2.7% month-on-month in October, while the IBD/TIPP economic optimism also beat the consensus of 52.3, coming in at 54.8.

Third quarter revised unit labour costs growth was also better than expected at 0.7% quarter-on-quarter – 0.4% was called for – while third quarter revised non-farm productivity growth was close to expectations at 3.1% quarter-on-quarter.

October trade balance, however, disappointed at negative $42.6 billion while negative $41.5 billion was expected.

Other key US data due later today includes Jolts jobs openings and weekly crude oil inventories.

In other commodities, the Brent crude oil spot price was recently at $53.56 per barrel on Wednesday, down 0.59% from Tuesday’s close.

In currencies, the US dollar index was unchanged at 100.50 recently on Wednesday.

In equities, the Shanghai Composite gained 0.04% to 3,201.03 so far today.

In the other precious metals, the spot silver price increased $0.03 to $16.71/16.73 per oz. Platinum at $928/938 per oz was up $1, while palladium rose $2 to $732/737 per oz.

On the Shanghai Futures Exchange, gold for June delivery was recently at 268.00 yuan ($39) per gram, and the June silver was at 4,176 yuan per kg.

(Editing by Kyle Docherty)

The post Gold drifts on lack of market catalyst, more downside seen appeared first on The Bullion Desk.

from The Bullion Desk http://ift.tt/2gQFYZ3
via IFTTT