Gold price steadies while stocks recover, US data in focus

Otmane El Rhazi from The Bullion Desk.

Gold steadied on Thursday morning after dropping to its lowest in a week in the previous session, with investors switching their attention from the turmoil in Chinese markets to the timing of a US interest rate rise.

The spot gold price was last at $1,128.4/1,128.8 per ounce, up $5.20 on Wednesday’s close. Trade has ranged narrowly from $1,123.20 to $1,129.20 so far.

Comments by New York Federal Reserve president William Dudley on Wednesday that a case for a rate rise increase in September is “less compelling”, given international developments and volatility in financial markets, provided some support.

“Turmoil across global markets did little to bring people back to gold as investors ignored the metal’s haven appeal and focused on the prospect of higher US interest rates,” ANZ said in a note.

In equities, shares in Asia and Europe rose today after the biggest gain in US stocks in more than four years on Wednesday. Ending five consecutive days of falls, the Shanghai composite index closed with gains of 2.13 percent at 2,989.693 – having earlier topped 3,000.

Currencies are correcting too, with the dollar index rallying – it was last at 95.35. Monday’s low was 92.56.

“With other markets getting some lift and with the dollar rebounding, gold may struggle for a while but as we expect only a short counter-trend up move in other markets. So the dip in gold may well find support because there may be more market anguish ahead,” FastMarkets William Adams’ said.

“The more industrial precious metals are likely to get some lift along with the base metals,” he added.

Investors will be eyeing today’s US preliminary GDP – forecast at 3.2 percent, up from the previous 2.3 percent – and jobless claims – estimated at 275,000 from last reading of 277,000 – for further clues of the timing of the Fed’s first rise in interest rates from near-zero levels.

Pending home sales and national gas storage numbers are also scheduled for release later this afternoon. Today is also the start of the Jackson Hole Symposium when central bankers and leading market players meet – Fed chair Janet Yellen is not attending this year.

In data already released in the eurozone, M3 money supply and private loans both came better than expected at 5.3 percent and 0.9 percent respectively but German import prices undershot at -0.7 percent.

In the other precious metals, silver was last at $14.25/14.30 per ounce, up 14 cents – it dipped below $14 in the previous session. Platinum at $994/999 climbed $13 and palladium at $545/550 was also up $13.

(Editing by Mark Shaw)

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