Gold News

Gold Prices "lacklustre" but "supported" with uncertainty in Ukraine, US retail sales flat

SPOT GOLD PRICES remained supported above $1300 on Wednesday morning in London but rallied following the US retail sales data to almost $1315, a level first reached this week on Tuesday. Asian stock markets traded slightly higher, with Japan’s Nikkei extending its recovery from two-month low. Europe followed the lead and traded also higher, with the Dax gaining 1% ahead of tomorrow’s German GDP data.

US retail sales were flat in July, “pointing some loss of momentum in the economy”, according to Reuters. July’s reading was the lowest since January 2014.

Silver tracked gold and after dropping below the level of $20 per ounce this morning only to recover after the retail sales data release. Less than 48 hours away from the last Silver Fix, the market is impatient to know how the new London Silver Price will affect the trading.  

Brent crude fell to thirteen month low to $102.39 per barrel. In the currency markets, the Euro traded lower against the US Dollar, at $1.3352  this morning. Ukrainian Grivna fell to a record low in the country’s history amid the economic crisis and the Eastern Ukraine armed conflict.

Russian humanitarian aid convoy resumed its journey to the south of Ukraine. Uncertainty remained about how the aid would be delivered, as Russia was thought to be using the convoy as an excuse for military action in Ukraine.

“Precious metal markets were lacklustre as rising geopolitical tensions were countered with a slightly stronger USD,” says a commodity note from ANZ. Gold prices pushed above $1315 yesterday following the news that Ukraine would block a convoy of Russian trucks that carried humanitarian aid. In the evening investor appetite diminished and the EUR weakened against the USD.

“It is clear that safe haven buying is providing a base of support, rather than a fillip for a move higher,” it adds pointing out that the outlook for prices remains subdued.

Commerzbank emphasizes on its technical note that the market continues to see recovery off its 61.1% retracement at 1280. “Our outlook is bullish while above 1280... Resistance lies at 1335 ahead of the July high at 1345,” adds the German bank in Frankfurt.

Gold prices at the Shanghai Gold Exchange traded at a premium of $2 per ounce above London quotes at session closing time in China.

The Bank of England halved its forecast for average wage growth, to 1.25% this year. Following Bank’s governor Mark Carney speech on the quarterly inflation report, the Pound Sterling hit a ten-week low against the Dollar, pushing gold price in Sterling away from 4-session low to over £783.  

Gold futures on the COMEX were little changed despite geopolitical concerns yesterday. The most active gold contract for December delivery rose 10 cents, or 0.01 percent, to settle at 1,310.6 dollars per ounce.

Maria Vengut was the former Head of Customer Services at BullionVault and was also responsible for the Spanish and Latin American markets. She was the Editor of Noticias Oro. Maria joined the company in October 2011 and left in 2022.

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