Gold was on an even keel Monday despite the fact that global equity market whipsawed during an extremely volatile session.
Gold for December delivery on the Comex division on the New York Mercantile Exchange was last down $5.00 or 0.4 percent to $1154.60 per ounce. Trade has ranged from $1,151.80 to $1,169.80.
Fears of Chinese economy grinding for a protracted period reached critical mass today as the Shanghai Composite Index fell 8.5 percent to 3,209.91, while dragging the other global equity markets down with it.
The Dow Jones industrial average fell over a 1,000 points on the echo of the opening bell, with major market participants Glencore and Noble each tumbling 12 percent and 7.9 percent respectively at one point.
China is the main end-user of commodities, but after years of investment projects in new infrastructure, the country is in the midst of a transition to a service oriented economy.
“The fresh rout of selling spread panic amongst European and US equities, further fueling speculation that a US rate rise will not take place before 2016,” Triland Metals said.
The aforementioned rate rise has turned into a hot-button issue with supporters and detractors.
Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, is set to speak tonight after saying on August 10 that the Fed was “close” to hiking rates.
The CME Group FedWatch – a tool used to gauge the market’s expectation of a Fed Funds rate adjustment – currently predicts a 24 percent probability of a rate hike in September.
This morning the number stood at 28 percent and was near 50 percent earlier in the month.
Meanwhile, the net long fund position (NLFP) on Comex climbed 9,217 contracts last week when 11,283 lots of short-covering outweighed 2,066 contracts of long liquidation.
The gross short position is at 144,053 contracts, down from a record high of 159,441 contracts on July 21. Previous peaks were around the 110,000-120,000 level, so the gross short position remains large.
Turning to US equities, the Dow Jones industrial average and S&P both rebounded, but were still in negative territory by 2.3 percent and 2.7 percent respectively. The dollar was 1.6 percent softer at $1.1566 against the euro.
As for the other precious metals, Comex silver for September delivery was last down 49.6 cents at $14.805 per ounce. Trade has ranged from $14.555 to $15.390.
Platinum for October delivery on the Nymex declined $34.90 to $992.20 per ounce, while the most-actively traded palladium contract was at $576.20 per ounce, down $28.25.
(Editing by Tom Jennemann)
The post Gold oddly steady as panic engulfs equities appeared first on The Bullion Desk.
No comments:
Post a Comment