Gold got off to a modest start on Monday morning when a weaker dollar and selling pressure out of China left the metal unchanged from the pre-weekend close.
The spot gold price was last at $1,182.00/1,182.80 per ounce although the metal touched near-two week highs at $1,187 earlier.
The dollar’s sustained retreat to 1.0821 against the euro is providing most commodities with a degree of respite following suggestions from the US Federal Reserve last week that growth in the US economy is not as strong as many initially thought.
This may have extended the probable timetable for the raising of US rates and a slower pace than previously thought.
But a waning in Chinese demand has dampened any prospects of an immediate push in gold towards $1,200.
“After being decent buyers continuously for last few weeks the Chinese opened up today on the sell-side, evident from the significant drop in the premium from $5-6 late last week to about $2 this morning,” MKS’ Alex Thorndike said in a note.
But turnover was “impressive”, with around 54,000 kilograms of the popular Au (T+D) contract changing hands, according to the daily quotes from the Shanghai Gold Exchange.
“The precious metals are undergoing a strong rebound, at least gold, silver and platinum are, while palladium, which has not suffered to the same extent as the others on the downside in recent weeks, is consolidating,” FastMarkets analyst William Adams said.
“Although the rebounds have been sharp, we feel the gold price will need to establish itself above $1,200 if it is to break the back of the overall downward trend,” he added.
Despite a quiet day for data today, developments over the Greek debt crisis will be monitored as concerns over whether the country can reach an agreement with its creditors continue.
Greek Prime Minister Alexis Tsipras is meeting with German Chancellor Angela Merkel today to discuss the matter but early indications are that, unless Greece produces a comprehensive list of reforms, no further funding will be provided.
In other data, eurozone consumer confidence figures are due, as is a testimony from ECB president Mario Draghi, as well as US existing home sales.
Other metals were similarly quiet – silver was last two cents lower at $16.67/16.72 per ounce, while palladium at $772/777 was up $1 and platinum was unchanged at $1,135/1,140.
(Editing by Mark Shaw)
The post Gold price in subdued start as Chinese premium drops appeared first on The Bullion Desk.
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