Gold edges higher but risk remains as market turmoil subsides

Otmane El Rhazi from The Bullion Desk.

The gold price rose during Asian trading hours on Friday, paring back some of the losses made overnight.

Spot gold was last at $1,130.2/1,130.5 per ounce, up $4.5 on Friday’s close. Trading ranged from $1,124.5-1,131.2 so far.

The spot price had dipped briefly below $1,120 on Thursday. Interest in the yellow metal has waned as market sentiment improved on stabilising global equity markets and stronger US data.

“Gold remains a sell on rallies with risk back on the table,” said MKS Group in a Friday morning note.

The Chinese stock market continued its climb on Friday morning. The Shanghai composite index rose 1.66 percent to 3,134.669 so far after closing at 3,083.591 on Thursday, which was up 5.35 percent and its first gain in six days.

Overnight US equities had closed more than two percent higher in a second consecutive day on Thursday. Market participants also took heart from encouraging US data released on Thursday.

The US preliminary GDP quarter-over-quarter jumped 3.7 percent – beating the forecast of 3.2 percent and above the previous reading of 2.3 percent – while the preliminary GDP price index quarter-over-quarter was at 2.1 percent, above the estimate of two percent. The US weekly initial jobless claims stood at 271,000, below estimates of 275,000 and under the psychological 300,000 mark.

Market participants will look to the happenings at the Jackson Hole Symposium in Wyoming starting later on Friday.  The US goods trade balance, core PCE price index and personal spending data, and the EU’s German preliminary CPI and Spanish flash CPI are due on Friday.

In other precious metals, silver was at $14.5/14.55 per ounce, up $0.02. Platinum was at $1,008/1,013, up $6, with palladium also increased $9 to $577/582 so far on Friday morning.

On the Shanghai Futures Exchange, gold for December delivery was flat at 235.05 yuan per gram, while December silver was unchanged at 3,334 yuan per kilogram recently on Friday morning.

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