Gold price recovers from earlier sell-off; softer dollar helps

The gold price inched higher during Tuesday December 6 trading, recovering from the previous day’s sell-off, underpinned by a softer dollar. 

The spot gold price was last at $1,175.15/1,172.90 per oz, up $3.10 on the previous day’s close. The metal had crashed to a ten-month low of $1,157 per oz in the previous session as confidence returned to the equity markets.

Gold in euros fell below €1,080 per oz to hit its lowest level since early April. The difference between the day’s high and the day’s low yesterday was more than €50 – the highest since the Brexit referendum at the end of June, Commerzbank pointed out.

Still, the bank expects the price to ramp up next year while foreign exchange markets stabilise; it expects the gold price to rise to $1,300 per oz by the end of 2017.

Meanwhile, a further reduction in open interest and, in particular, long positioning bodes well for the metal following recent tests lower.

“While it’s easy to put forward a bearish viewpoint leading into next week’s US Federal Open Market Committee (FOMC) meeting, considering an interest rate increase in effectively priced in, the risk looks to be ever increasing to the top-side,” MKS said.

The FOMC will meet on December 14; many participants expect an interest rate rise to be announced, particularly after a run of positive data from the USA.

In data today, there will be EU-revised GDP, while the USA has revised non-farm productivity, trade balance and factory orders of note.

The dollar index was last at 100.02, down 0.17%.

The spot silver price was up $0.055 at $16.775/16.800 per oz, while platinum increased $6 to $938/943 per oz – close to two-week highs. Palladium at $742/748 per oz was $3 higher.

(Editing by Wei Jun Lau)

 

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