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Gold ticks higher, physical demand muted
Feb 19, 2016 - 8:18 PM GMT
by Dalton Barker
The gold price increased modestly for the third consecutive day as a safe-haven rally is being thwarted by weak physical demand.
Gold for April delivery on the Comex division of the New York Mercantile Exchange was last up $6.70 or 0.6 percent to $1,133.00 per ounce. Trade has ranged from $1,220.60 to $1,235.30.
Physical demand slowed during the Chinese Lunar New Year, but global demand is also suffering as consumers and well-stocked jewellery manufacturers hold off while waiting for the price of gold to drop, according to multiple gold traders.
“The floor has probably risen but it is way too soon to be talking about a new gold bull market in our view,” Tom Kendall, Head of Precious Metals Strategy at ICBC Standard Bank, said.
“Given that and the weakness of physical demand, from a short-term tactical perspective we would rather sell gold here than chase a flagging rally,” Kendall added.
Market participants also await further monetary decisions out of the eurozone and China, which has drawn closer scrutiny after the Japanese central bank decided to lower nominal interest rates into negative territory for the first time in history.
A lack of inflation and threats of another global recession has led central bankers to adopt looser monetary policy and aggressively combat sagging growth.
“The monetary authorities in the US, in Europe, in Japan, in China et al have no choice but to expand the supply of reserves aggressively and materially rather than continue the destabilizing and very public decision to allow short term and even medium term interest rates to move into negative number,” Dennis Gartman, editor and publisher of The Gartman Letter, said.
In spec positioning, gold ETF holdings continue to see inflows but the rate appears to be slowing, with only 2.43 tonnes added yesterday, reflecting reduced upside expectations.
Meanwhile in data, US CPI and Core CPI month-over-month in January came in unchanged and an increase of 0.3 percent respectively, both were above forecasts of a -0.1 decline and 0.2 percent gain.
US equities are on pace to end the week on a dour note with the Dow Jones industrial average and S&P down 0.3 percent and 0.4 percent respectively, while the dollar softened 0.3 percent to $1.1137 against the euro
As for other precious metals, Comex silver for March delivery fell one cent or 2.2 percent or 0.1 percent to $15.410 per ounce. Trade has ranged from $15.290 to $15.495.
Platinum for April settlement ticked down $2.20 or 0.2 percent to $943.40 per ounce, while the most-actively traded palladium contract stood at $497.95 per ounce, down $6.90.
(Editing by Tom Jennemann)
Check the Bullion Desk gold price charts for the latest Gold Prices.
About Dalton Barker
View all stories by Dalton Barker »
http://www.bulliondesk.com/gold-news/us-gold-close-gold-ticks-higher-physical-demand-muted-109319/
Feb 19, 2016 - 8:18 PM GMT
by Dalton Barker
The gold price increased modestly for the third consecutive day as a safe-haven rally is being thwarted by weak physical demand.
Gold for April delivery on the Comex division of the New York Mercantile Exchange was last up $6.70 or 0.6 percent to $1,133.00 per ounce. Trade has ranged from $1,220.60 to $1,235.30.
Physical demand slowed during the Chinese Lunar New Year, but global demand is also suffering as consumers and well-stocked jewellery manufacturers hold off while waiting for the price of gold to drop, according to multiple gold traders.
“The floor has probably risen but it is way too soon to be talking about a new gold bull market in our view,” Tom Kendall, Head of Precious Metals Strategy at ICBC Standard Bank, said.
“Given that and the weakness of physical demand, from a short-term tactical perspective we would rather sell gold here than chase a flagging rally,” Kendall added.
Market participants also await further monetary decisions out of the eurozone and China, which has drawn closer scrutiny after the Japanese central bank decided to lower nominal interest rates into negative territory for the first time in history.
A lack of inflation and threats of another global recession has led central bankers to adopt looser monetary policy and aggressively combat sagging growth.
“The monetary authorities in the US, in Europe, in Japan, in China et al have no choice but to expand the supply of reserves aggressively and materially rather than continue the destabilizing and very public decision to allow short term and even medium term interest rates to move into negative number,” Dennis Gartman, editor and publisher of The Gartman Letter, said.
In spec positioning, gold ETF holdings continue to see inflows but the rate appears to be slowing, with only 2.43 tonnes added yesterday, reflecting reduced upside expectations.
Meanwhile in data, US CPI and Core CPI month-over-month in January came in unchanged and an increase of 0.3 percent respectively, both were above forecasts of a -0.1 decline and 0.2 percent gain.
US equities are on pace to end the week on a dour note with the Dow Jones industrial average and S&P down 0.3 percent and 0.4 percent respectively, while the dollar softened 0.3 percent to $1.1137 against the euro
As for other precious metals, Comex silver for March delivery fell one cent or 2.2 percent or 0.1 percent to $15.410 per ounce. Trade has ranged from $15.290 to $15.495.
Platinum for April settlement ticked down $2.20 or 0.2 percent to $943.40 per ounce, while the most-actively traded palladium contract stood at $497.95 per ounce, down $6.90.
(Editing by Tom Jennemann)
Check the Bullion Desk gold price charts for the latest Gold Prices.
About Dalton Barker
View all stories by Dalton Barker »
http://www.bulliondesk.com/gold-news/us-gold-close-gold-ticks-higher-physical-demand-muted-109319/
