The gold price looked susceptible to dropping to fresh-five year lows on Friday, pressured lower by a stronger dollar and continued outflows from exchange traded funds (ETFs).
Spot gold was last down $6 at $1,081.60/1,082.40 per ounce, just marginally above five-year lows at $1,077. The metal has so far traded within an intraday range of $9.
Continued pressure from a stronger dollar and a risk-on environment is weighing on precious metals prices this morning – silver was down 13 cents at $14.57/14.62, palladium down $5 at $611/616 and platinum down $7 at $976/981.
“The return to a risk-on environment, where riskier assets, including stocks, tend to perform well, has induced an appreciation of the dollar given the increase in positions in the euro and the yen carry trades. This likely placed downward pressure on gold prices,” FastMarkets analyst Boris Mikanikrezai said.
The US currency was last at 1.0953 against the euro, having been bolstered in the previous session by both punchy US GDP data and FOMC minutes that have been interpreted as hawkish.
US advance GDP in the second quarter was up 2.3 percent with revised first quarter GDP at 0.6 percent. Both numbers were below expectations, but still demonstrate a strengthening US economy with an annualised rate of growth of over two percent.
“This is likely to confirm the US Federal Reserve’s impression of a moderate economic recovery, meaning that it will remain on course to increase interest rates before the year is out. When exactly it will implement rate hikes will probably now depend above all on the next labour market reports,” Commerzbank said in a note.
Nonetheless, continual outflows of gold from ETFs are capping any real recovery in the metal’s price. Holdings in funds tracked by FastMarkets have decreased for 14 consecutive sessions and are now at their lowest since February 2009 at 1,537 tonnes.
Those in platinum and palladium, however, have increased – holdings in platinum increased by 106,966 ounces and 25,279 ounces in palladium.
“Without these inflows, platinum and palladium prices would doubtless be significantly lower,” Commerzbank added.
In wider markers, Asian markets closed in positive territory this morning, key indexes in Europe have also opened marginally higher.
In data out of Japan this morning, household spending at -2 percent missed forecasts, as did the unemployment rate at 3.4 percent and Tokyo core CPI at -0.1 percent. The national core CPI was however up 0.1 percent.
In Europe, German retail sales fell short at -2.3 percent as did French consumer spending at 0.4 percent and the Italian unemployment rate at 12.7 percent. Eurozone core consumer inflation however at one percent was better than the forecasted 0.8 percent while the flash estimate at 0.2 percent was as expected.
Still to come from the US will be the employment cost index, Chicago PMI and the University of Michigan’s consumer sentiment and inflation report.
(Editing by Kathleen Retourne)
The post Gold hovering above fresh five yr lows, ETF outflows continue appeared first on The Bullion Desk.
No comments:
Post a Comment