Gold price traded slightly higher in Asian trade on Monday in the holiday-shortened week, although prices continued to stay right beneath the key $1,200 level.
The recent sharp declines in oil prices have proved very influential in pressuring other commodity prices, but a bounce towards the end of last week did help to pull gold prices up.
“The bounce in crude prices also helped boost gold and would continue to if oil manages to trade higher. The bullion market faces tough upside resistance, however, and further gains may be an uphill battle,” said analyst James Steel from HSBC Securities.
However, a rising dollar due to the eventual increase in interest rates in the US will continue to cap gains on gold.
“A strong USD and the likelihood of highere US rates even if inflation remains subdued, is a recipe for lower gold prices…The run up to the holiday period is traditionally volatile for prices as volumes drop off and even relatively modest investor purchases or sales can have a magnified impact on the market,” Steel added.
Gold price traded last at $1,197 per ounce, $2.50 higher than where it ended on Friday. Silver broke above the $16 mark on Friday to end at $16.09 per ounce. Current prices are slightly lower at $16.03.
The week ahead will also see a quiet data docket as holiday season kicks it. Expect little to none from the European markets with just retail sales data for France and Italy out on Tuesday, and US data to dominate for the rest of the week. These include final quarterly GDP numbers, new home sales and unemployment claims.
Platinum and palladium are both slightly lower today although the latter did see strong gains of close to two percent on Friday. Platinum is $2.50 lower at $1,195 while palladium is $3.50 lower at $803 per ounce.
The post Gold price to see more volatility in thin holiday trading appeared first on The Bullion Desk.
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