The gold price reversed some of its losses from the previous session on Thursday, against the backdrop of a relatively weaker dollar and increased demand through Asian hours this morning.
Spot gold was last at $1,103.80/1,104.50 per ounce, up $9.40 on Wednesday’s close, where the metal came close to setting fresh five-year lows.
Today, recent dollar strength continued to wane, allowing precious metals to move higher. The greenback was last at 1.1001 against the euro, a one-week low.
European equity markets have also ticked higher, particularly following news that the Greek parliament has passed the second set of crucial reforms needed to unlock funds from international creditors.
Asian trade was also said to have been sturdy this morning, MKS said in a note on Thursday, with the on-shore premium holding in positive territory around $1.50 – supporting gold back up above the $1,100 per ounce level.
“Against this backdrop, gold is too cheap, and is still facing headwind from the investment side as ETF investors continue to sell,” Commerzbank said in a note.
In ETFs tracked by FastMarkets, gold holdings decreased for the eight consecutive session and are now at fresh 2015 lows of 1,564 tonnes.
“The gold price is unlikely to make any noticeable or lasting gains for as long as the outflows continue,” the bank added.
In other metals, silver was last up 0.75 percent at $14.88/14.93 per ounce, up 11 cents on Wednesday’s close, while platinum was up $11.50 at $990/995 and palladium was unchanged at $631/636.
On the data-front, Spanish unemployment at 22.4 percent came in better than expected. Still to come this afternoon will be US weekly unemployment claims, predicted to come in at 279,000.
“We will have to see what happens to gold over the days ahead; it seems that prices will likely bottom out when we see one more round of heavy selling, to be followed by a same-day reversal to the upside, indicative of a reversal in the trend and perhaps a mark of a short-term bottom,” INTL FCStone’s Ed Meir said. “One negative for gold is oil, a complex which we think could be the next to give way and perhaps generate a negative back loop, given that support at around the mid-$49 per barrel mark on WTI has given way,” he added.
Today, WTI is trading at $49.31 per barrel, having hit lows of $49.03 in the previous session, while Brent is trading at $56.11 a barrel, not far from April lows of $55.08.
(Editing by Martin Hayes)
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