EC:Commodities: Gold prices decline along with oil prices
The spot gold price is 0.17% higher on the day at $1526 an ounce.
The spot silver price is 0.45% lower at $35.43 an ounce.
Looking at recent action in the precious metals sector we note that prices eased across the complex yesterday led by the weakness in palladium.
Palladium prices lost 2.5% to close at $752.4/oz, its weakest close this month as concerns over weakness in demand continue to weigh upon prices. Platinum prices fell by 1% to settle at $1752/oz, its lowest close since 23rd May.
The PGMs have been caught between supply side constraints and physical demand, from China in particular, providing support on the downside but a demand slowdown capping the upside.
Short term investor interest has turned positive in recent sessions with speculative interest in Nymex palladium rising to a three month high.
"Platinum ETP interest has been unchanged over the past week; however, palladium suffered from net redemptions yesterday falling by 9.7koz. Gold prices closed less than $2 lower on the day as the dollar strengthened against the euro to levels not seen in three weeks, equity markets retained their recent weakness, concerns over Greece heightened and US macro data was mixed. Gold prices remain well supported despite the seasonal weakness in physical demand," says a note from Barclays Capital.
Gold prices
Gold may decline for a second day in London as a drop in oil prices curbs demand for an inflation hedge and as some investors sell the metal to cover losses in other assets including equities.
Oil fell to its lowest price in almost four months in New York on concern the Greek debt crisis will threaten Europe’s economic recovery. The MSCI All-Country World Index of equities earlier today fell to a three-month low. Gold is trading 3.2 percent below its record reached last month.
“If crude oil declines, it may imply less inflation pressures,” Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. “You cannot rule out that some investors also sell gold to cover losses in other assets.”
