adminLONDON. — Gold rose yesterday as the dollar moved lower, after the previous session’s price drop, but was still vulnerable to further losses as strong US data could fuel expectation the Federal Reserve will soon scale back stimulus. Traders said with today’s Thanksgiving holiday in the US, market activity could slow down and only pick up next week.
But ahead of that, the market will watch a flurry of US data, including the October durable goods report, weekly jobless claims, the Chicago purchasing managers index and final Michigan sentiment survey for November.
“I wouldn’t expect much happening with Thanksgiving tomorrow (today) although if the data today (yesterday) comes in positive there is always the question whether the Fed could move to announce tapering in December or January,” Société Générale analyst Robin Bhar said.
Spot gold was up 0,8 percent to US$1 252,14 an ounce by mid-morning yesterday. It lost nearly 1 percent in the previous session after strong US housing data. US gold futures were up 0,9 percent to US$1 252,10 an ounce.
However, technical analysts said that as long as gold remained below US$1 300 it faced the risk of further declines.
The dollar dipped against a basket of currencies as US Treasury yields fell.
The next major data release is on December 6, when non-farm payroll figures are scheduled.
The Fed’s next policy meeting will be held on December 17-18.
Gold, whose appeal as a hedge against inflation has been burnished by the Fed’s quantitative easing, has fallen more than 25 percent this year as investors pulled money out of bullion to invest in higher-yielding equities on signs the US central bank would start withdrawing stimulus.
Economists polled by Reuters expect the US central bank to begin tapering only in March, with a small chance it could do so as soon as January.
Until then, the Fed will carry on creating US$85 billion of new money every month by purchasing bonds for its own portfolio.
China’s net gold imports from Hong Kong hit the highest in seven months in October, data released on yesterday showed.
Rules introduced by the Indian government earlier this year to reduce a high current account deficit, curbed demand for gold, the second-largest item on its import bill after oil.
Chow Tai Fook Jewellery Group, the world’s largest jewellery retailer by market value, posted a 92,3 percent rise in net profit for the six months ended in September. — Reuters.
Silver rose 1,2 percent to US$20,07 an ounce.
Spot platinum gained 0,9 percent to US$1 380,75 an ounce, while spot palladium was up 0,9 percent to US$722,55 an ounce. — Reuters.
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