Gold up $10 on the day
Gold is up $10.50 to $1502 as the focus moves to the Federal Reserve and the risks around trade. Earnings have also raised some eyebrows, especially in industrials. On the conference call today, 3M warned that its growth will be down mid-single digits in China next year.
There is a well-defined downtrend in gold that’s being challenged at the moment. I tend to draw these kinds of trends with a thick marker so I’d like to see something +1510 to say it’s definitively broken but we’re at a two-week high at the moment and back above $1500 so the bias it towards more strength on a break.
Gold edges down as investors await clarity on Brexit
Gold inched down on Thursday as investors awaited clarity on Brexit after the European Union delayed a decision on granting Britain an extension, while a weaker dollar provided a floor under prices.
With EU members delaying their decision on whether to give Britain a three-month Brexit extension, Prime Minister Boris Johnson said if the deadline was deferred until the end of January he would call an election by Christmas.
“Even if Brexit goes through, there are enough geopolitical uncertainties to keep gold supported for the next two to three years,” said Hareesh V, head of commodity research at Geojit Financial Services.
“The dollar (index) has corrected from the 99.5 level to 97.2 on a continuous basis for the last two weeks. That is providing some support to prices,” he said.
The dollar index, which measures the greenback against a basket of other currencies, was down 0.1% at 97.396, on track for its second straight session of losses.
Markets have been volatile for months due to geopolitical uncertainties such as the U.S.-China trade war, Brexit, Hong Kong protests and tensions in the Middle East.
Non-yielding bullion is often seen as a safer investment during political and financial turmoil.
OANDA analyst Jeffrey Halley pointed to a lot of stale long positions and said a breakdown through $1,460.00 was likely to prompt more long-term holders to unwind positions to lock in profit.
Market participants await European and U.S. manufacturing data due on Thursday to gauge the health of the global economy, and a European Central Bank meeting, with no policy change expected at President Mario Draghi’s last at the helm.
Investors also await the U.S. Federal Reserve’s meeting on Oct. 29 and 30, at which it is expected to cut its benchmark interest rate.
Asian shares pulled ahead as corporate earnings and a ceasefire in northern Syria helped lift sentiment, though the U.S.-China trade spat and Brexit prevented a decisive shift towards riskier assets.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.13% to 918.48 tonnes on Wednesday from 919.66 tonnes on Tuesday.
Silver fell 0.4% to $17.49 per ounce. Platinum was up 0.6% at $920.74 per ounce after scaling a more than three-week high, while palladium rose 0.6% to $1,752.53 per ounce.
China’s net gold imports via Hong Kong fall in September
(Reuters) – China’s net gold imports via Hong Kong fell 9% in September from the previous month, data from the Hong Kong Census and Statistics Department showed on Thursday, mainly due to softer demand and possible measures by Beijing to prop up the yuan.
Net imports via Hong Kong to China, the world’s top consumer of the metal, decreased to 11.829 tonnes in September from 12.997 tonnes in August, the data showed.
Total gold imports via Hong Kong fell about 8% to 14.44 tonnes from 15.661 tonnes in August.
In August, China’s net monthly gold imports via Hong Kong had jumped nearly 61%, bouncing off their lowest in more than eight years in July.
The relatively low volumes could be attributed to lower demand and in part to China’s efforts to protect the yuan exchange rate from outflows, Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS, said.
Hong Kong, traditionally the main physical gateway of gold to China, has been engrossed in months-long political unrest that has also impacted jewelery sales and stoked concerns about shipping gold out of the city.
However, “the central bank, PBOC, will likely release another batch of import permit in the rest of this year. We don’t know the quantity in terms of the permit, but once they release it, the import volume should pick up somewhat,” Li said.
International benchmark spot gold prices XAU= in September marked its first monthly decline in five, with bullion being sold at a premium of between $8 to $12 in China over the benchmark for most of the month.
China does not provide trade data on gold and the Hong Kong data may not provide a complete picture of Chinese purchases as gold is also imported via Shanghai and Beijing.
Reporting by Sumita Layek in Bengaluru; Editing by Toby Chopra and Arun Koyyur
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