The gold price inched higher in Asian trading hours in range-bound trading amid a lack of new macroeconomic data or policy changes to move the market.
Spot gold was last at $1,116.2/1,116.6 per ounce, up $1.7 on Friday’s close. Trading ranged at $1,114-1,117.5 so far. The gold price stayed above the $1,100 psychological level as concerns remained over a softening Chinese economy.
After three straight days of yuan devaluation by the People’s Bank of China last Tuesday-Thursday and a slight increase on Friday, the Chinese central bank on Monday set its daily guidance rate at 6.3969 yuan against the dollar, up 0.01 percent from 6.3975 on Friday.
Gold prices could continue to push higher in the near-term fuelled by short-covering given that the gold short trade has become overcrowded, said Boris Mikanikrezai, Fastmarkets’ senior commodities analyst.
“But weakness should re-emerge later in the second half of this year, partly due to an unfriendly gold environment characterised by an appreciating dollar and rising US interest rates as the Fed is set to normalise its monetary policy stance at some point this year,” he added.
In data, Japan announced on Monday morning its second quarter preliminary quarter-on-quarter GDP at -0.4 percent, a decline from the previous quarter’s 1 percent growth. The EU is due to release its trade balance figure and the US, its empire state manufacturing index and NAHB housing market index later on Monday.
In other precious metals, silver was at $15.26/15.31 per ounce, up $0.07. Platinum was at $990/995, up $3.5, while palladium was also up $3 to $615/620.
On the Shanghai Futures Exchange, gold for December was flat at 231.75 yuan per gram, while December silver was recently at 3,451 yuan per kilogram, also unchanged.
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