The gold price has rebounded after washing out on Friday afternoon when investors took up positions ahead of the Swiss gold referendum in which voters overwhelmingly rejected a proposal to raise the country’s gold reserves.
Spot gold was last at $1,174.80/1,175.50 per ounce, up $8.00 on Monday’s close and recovering from an early three-week low of $1,146.80. Trading has been in a wide intraday range of $37.60.
In Sunday’s referendum, 78 percent of voters rejected the “Save our Swiss gold” initiative, which would have forced the Swiss National Bank to $60 billion of gold at current spot prices to raise its holdings to 20 percent from around 7-8 percent at present.
“Although polls had already indicated the likelihood of a No vote, the market’s response this morning is considerable all the same. Clearly some market participants had still been positioning themselves for a positive outcome of the referendum after all, lending support to the gold price in recent weeks,” Commerzbank said in a note.
“We do not expect gold to remain for any length of time at its current level, but envisage higher prices in the medium to long term,” it added.
The market appeared to have shrugged off the lifting of restrictions on Indian gold imports, Commerzbank added – late last week the government rescinded the 80:20 rule that made it mandatory to export 20 percent of all imported material – although part of this morning’s bounce could be a delayed response.
Prices had been pressured lower by the recent slump in oil prices, which was strengthened on news that OPEC will not cut its current production levels of 30 million barrels a day, a decision that has dampened sentiment in commodities generally.
A busy day of economic data is also a factor: This morning, China’s manufacturing PMI at 50.3 fell slightly short of forecast but ultimately was down on the previous month’s 50.8, while the HSBC PMI was in line with predictions at 50.0.
In Japan, the final manufacturing PMI at 52.0 was in line as was the EU number at 50.1, including a prediction-beating 54.7 in Spain, while the Italian number fell short at 49.0.
The ISM manufacturing PMI and official report out of the US are due before speeches from FOMC members.
In the other metals, silver hit a five-year low earlier $14.65 before bouncing to an effectively unchanged $15.41/15.46 per ounce.
“On the industrial side the solar industry as a silver consumer increasingly comes to the fore again. Every solar panel thereby carries 15-20 grams of silver. And again, China plays a primary role as its efforts to combat air pollution does not only lead to China being a global solar market leader with 30-percent market share but also continuously increases its yearly photovoltaic installations,” Heraeus said in a note.
Platinum at $1,196.00 per ounce was up $1 after hitting a near-two-week low at $1,182.50 earlier while palladium at $801/806 was $3 lower.
(Editing by Mark Shaw)
The post Gold price stages recovery after Swiss vote sell-off appeared first on The Bullion Desk.
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