Gold News

Gold Prices Slip as Western Funds 'Chase It Higher', Indian Jewelry Stores 'Pin-Drop Quiet'

GOLD PRICES fell as London opened for business on Thursday, dropping $10 per ounce from yesterday's new 10-month Dollar high even as global stock markets struggled and the US currency fell further on the FX market.
 
Silver doubled the 1.1% drop in gold prices from this week's peak, troughing at $15.85 as gold fell to $1332 before steadying $4 higher as the start of New York trade drew near.
 
Platinum prices held firmer, retaining a 2.3% rise for the week so far at $826 per ounce, more than $45 above early February's 2-month low.
 
Shanghai gold prices closed overnight some 0.8% below yesterday's 31-month highs, retreating as the Yuan extended its rally versus the Dollar following "dovish" comments on US monetary policy from the Federal Reserve.
 
Minutes from last month's Fed meeting showed the committee agreeing unanimously to change the central bank's description of US economic growth from "strong" to "solid", with all members also agreeing to pause the so-called "run off" of the Fed's balance sheet – selling bonds bought over the last decade with quantitative easing – sooner than previously suggested in 2019.
 
Thanks to the rising Yuan, wholesale gold prices in China held a firm $10.50 per ounce premium on Thursday above London quotes, suggesting good demand in the metal's No.1 miner, private consumer and importing nation.
 
Chart of the US Dollar's Yuan exchange rate versus the gold price in Dollars. Source: St.Louis Fed
 
"Gold now has a life of its own," says George Gero at Canadian advisors RBC Wealth Management. 
 
"Bulls have the upper hand."
 
"While the [precious metals] complex has benefited from expectations of a very dovish Fed," says a note from Canadian brokerage T.D.Securities, "we think that [commodity trade advisors] have played a notable role in helping gold and platinum prices rally."
 
"You get a reverse snowball effect in gold rallies," agrees London broker David Govett at Marex Spectron. "The higher it goes, the more it attracts fund money."
 
Over in key consumer market India in contrast, "There has been pin-drop silence in jewelry stores, with hardly any customer footfall," Rediff quotes one Zaveri Bazaar retailer in Mumbai.
 
"One or two customers come only for exchange of gold ornaments," he goes on, because the Rupee price for consumer purchases is now setting new all-time record highs.
 
UK gold prices in Pounds per ounce sank 1.3% meantime Thursday morning, falling to the cheapest in a week at £1020 as the FTSE share index also fell on a steep rally in Sterling following lower than expected government borrowing data.
Euro gold prices today halved this week's 1.3% rise to April 2017 levels, falling back to €1175 as the single currency held near 2-week highs against the Dollar.

Adrian Ash is director of research at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn

 

 

scri

Market Fundamentals