MW: DJ PRECIOUS METALS: Spot Gold Unchanged, Remains In Narrow Range
Spot gold traded unchanged in Europe Thursday and traders and analysts said the precious metal will remain in a narrow range while investor interest is diverted to industrial metals.
"Nothing is happening," said Afshin Nabavi, head of trading and physical sales at MKS Finance. "There is no real news to surprise the gold market, everyone is waiting for direction."
At 0939 GMT spot gold was trading at $888.65 a troy ounce, down 0.3% from Wednesday's close. Spot silver was trading at $12.71/oz, down 0.3%. Spot platinum was trading at $1,214/oz, down 0.2%. Spot palladium was at $234/oz, down 0.2%.
While gold prices trade in a narrow range between $880/oz and $900/oz, copper is leading the industrial metals higher.
Gold prices could trade lower down to $800/oz in the summer due to weak investor and physical demand for the precious metal, said Commerzbank. Investor flows into exchange-traded funds is slow.
ETF holdings in the largest SPDR fund remained unchanged for the fourth consecutive day as of Wednesday data at a high of 1,127.68 tons.
"All we are waiting for is for Comex to complete its liquidation or a pickup in safe haven buying via the exchange-traded funds," said UBS analyst John Reade.
Adding further pressure to gold prices, inflation figures show lower consumer prices.
The euro zone's annual inflation rate, released Thursday, dived to a record low in March. And U.S. CPI data for March released Wednesday showed prices were lower on average than they were a year ago.
The precious metal could spend more time in limbo in the current $865/oz to $900/oz range until a clearer picture of the world economies is seen, said TheBullionDesk.com analyst James Moore.
However, the physical market is showing signs of pickup.
When gold slips below $880/oz there is some physical buying from India and the Middle East, MKS' Nabavi said.
Buying is taking place ahead of the April 27 festival in India, UBS' Reade said.
"This bodes well for demand later in the year and suggests that any major further correction in gold will see solid buying," Reade added.
