Gold trades listlessly, market in ‘Summer doldrums’

Otmane El Rhazi from The Bullion Desk.

Gold prices dipped modestly during the onset of the US trading week as a rash of mixed data and fresh oil lows did little to spark activity. 

Gold for December delivery on the Comex division of the New York Mercantile Exchange fell $5.70 to settle at $1,089.40 per ounce. Trade ranged from $1,085.90 to $1,097.10

In data today, Caixin US final manufacturing PMI in July was in-line with forecasts of 53.8. Core PCE price index month-over-month in June gained 0.1 percent, in line with forecasts. June personal spending and personal income were up 0.2 percent and 0.4 percent respectively, both matching consensus.

US construction spending fell to the lowest in five months, increasing 0.1 percent as opposed to the 0.8 percent expectation.

Turning to Asia, Caixin final manufacturing PMI for China was at 47.8, the lowest mark in two years and below estimates of 48.3, while the Japanese number at 51.2 was as expected but down from the previous reading of 51.4.

Additionally, light sweet crude (WTI) oil futures on Nymex earlier touched $45.11 per barrel, the lowest price all-time for the most active contract.

“Summer doldrums appear to be upon us as worse than expected ISM and construction spending had little to no effect on precious metals complex,” Triland Metals said.

Investors now await the US employment report due for release on Friday. Market participants remain bearish on the precious metals complex, with last week’s data showing net short positions increasing eight percent to a new record of 14,600 contracts.

“Trading looks likely to be choppy heading into the data release – that positioning is currently sitting at extreme levels may suggest market participants are generally reluctant to take on large positions ahead of a key event,” Joni Teves, an analyst at UBS, said.

Turning to US equities, the Dow Jones industrial average and S&P were down one percent and 0.7 percent respectively, while the dollar was 0.3 percent stronger at $1.0949 against the euro.

As for other precious metals, Comex silver for September delivery fell 33 cents to 14.415 per ounce. Trade has ranged $14.400 to $14.765.

Platinum for October settlement fell $25.90 to $959.10 per ounce, while the most actively traded palladium contract was at $594.75 per ounce, down $16.10.

(Editing by Tom Jennemann)

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