The gold price recovered to remain almost unchanged in afternoon London trading on Thursday despite heavy pressure from the dollar, which reached a fresh nine-year high against the euro.
Spot gold was last at $1,212.30/1,213.10 per ounce, up 60 cents on Wednesday’s close after looking susceptible to retesting the key psychological level of $1,200 earlier today – it bottomed out at $1,204.60.
The dollar hit a fresh December 2005 high against the dollar at 1.1753, threatening gold’s gains of recent sessions, while investors continued to digest the minutes of the December FOMC meeting that ultimately shed little light on the prospect of higher rates.
“Some of the comments were worth noting, namely that deflation continues to be a concern and also from the Fed’s Charles Evans who said that he believed raising rates too soon would be a mistake,” Marex Spectron’s David Govett noted. “This has helped the stock market and the dollar, but has had little effect on precious metals.”
In gold-specific news, physical gold premiums have normalised again in India after some import restrictions were relaxed in November. The premium on the price in London is reportedly $1 per ounce, following a figure of $6-10 in December, according to the All India Gems & Jewellery Trade Federation.
“Premiums should remain low for the time being given that gold is increasingly being imported legally into India. The Federation estimates Indian gold imports in December at 30-35 tonnes following the high imports in the two preceding months,” Commerzbank said.
In data today out of the US, weekly unemployment claims decreased by 4,000 to 294,000 last week, which was marginally above expectations
In other data, German factory orders fell 2.4 percent, worse than the expected drop of 0.6 percent, while eurozone retail sales grew by 0.6 percent in November, beating the 0.3-percent forecast. But Europe’s producer price index at -0.3 percent again highlighted the very real risk of regional deflation.
In other metals, silver at $16.42/16.47 is up 10 cents, while platinum at $1,219.12,224 is up $5 and palladium at $791/797 is up $6.
(Additional reporting by Tom Jennemann, editing by Mark Shaw)
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