Gold sees slight support from Germany, Turkey attacks

The spot gold price saw some support following attacks in Germany and Turkey but remained range-bound during Asian trading hours on Tuesday December 20.

The spot gold price was recently quoted at $1,139.30/1,139.70 per oz, up $1.50 on the previous close. Trade has ranged from $1,137.10 to $1,139.75 so far.

A truck plowed into a crowd in Berlin killing 12 and injuring 48, while Russia’s ambassador to Turkey was killed in a gun attack in the Turkish capital of Ankara on Monday, newswires reported.

The Japanese yen, considered a haven asset like gold, also received a boost following news of the attacks – the yen is up 0.26% against the US dollar so far today.

But any further rally for gold really needs a shift in the US dollar strength that has dominated since the US presidential election and intensified following the Federal Reserve meeting last week, Chris Beauchamp, a market analyst at IG, said.

The US Federal Reserve had raised the federal funds rate by 25 basis points to 0.5%-0.75% last week – the first increase since December 2015 – while also suggesting that three rate increases could come in 2017 compared with two previously.

Should gold fail to move above $1,142 per oz, it could head lower targeting the key level of $1,127 before heading on to $1,119, Beauchamp said.

In currencies, the US dollar index fell 0.08% to 103.05 so far on Tuesday.

In data released on Monday, the December US flash services PMI at 53.4 was below the forecast of 55.2. The German Ifo business climate index for December was 111.0 against a forecast 110.7.

It is a quiet day for data with mainly Japan’s monetary policy announcement, and China’s CB leading index due later. The Bank of Japan is expected to maintain interest rates at -0.1%.

In equities, the Shanghai Composite dropped 0.8% to 3,093.01 so far today.

In other commodities, the Brent crude oil spot price eased 0.4% to $54.82 per barrel recently on Tuesday.

In the other precious metals, the spot silver price increased $0.078 to $16.035/16.070 per oz. Platinum gained $4 to $918/923 per oz, while palladium decreased $1 to $675/680 per oz.

On the Shanghai Futures Exchange, gold for June delivery was recently at 266.60 yuan ($38) per gram, and the June silver was at 4,094 yuan per kg.

(Editing by Kyle Docherty)

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