Gold edged higher in the US on Tuesday amid a continued sell-off in equities and some opportunistic buying of precious metals.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was last up $5.50 at $1,235.50 per ounce. Trade has ranged from $1,232.30 to $1,237.50.
“We seem to be settling into a familiar pattern these days, with stocks floundering and unable to get much of a bid, while gold (at least on five of the last six days), seems to be taking advantage of the retrenchments by moving higher,” INTL FCStone’s Ed Meir said.
“For the balance of this week, investor focus will lie squarely on the US stock market, where key indices continue to deteriorate on a technical basis,” said Meir, who noted that the S&P 500 breached its 200-day moving average for the first time since November 2012 and is now down 7.6 percent over the last three sessions.
The precious metals complex is “pretty much in no man’s land at these levels”, Marex Spectron’s David Govett said, making it hard to predict where the next move will be. Still, he recommended selling rallies in gold towards $1,245 and buying dips below $1,220.
Nevertheless, after gold held its own at the $1,180 mark last week for the third time, prices have risen around $50, Commerzbank noted.
“The low prices are being viewed as an attractive opportunity to buy, something that is also reflected in robust coin sales: after more gold coins were already sold again in the US last month, sales in October also appear very robust, with 33,000 ounces of gold coins having been sold so far,” Commerzbank said.
In data this morning, German ZEW economic sentiment fell to a 22-month low of -3.6 in September, down 10.5 points from the previous month and well off the forecast for a 0.2 percent reading.
“Geopolitical tensions and the weak economic development in some parts of the eurozone, which is falling short of previous expectations, are a source of persistent uncertainty,” ZEW president Clemens Fuest said.
“These factors are tarnishing growth expectations in Germany. Disappointing figures concerning incoming orders, industrial production and foreign trade have likely contributed to the growing pessimism among financial market experts,” he added.
In wider markets, the euro fell sharply on the news, falling 0.79 percent to 1.2651 against the dollar, while Germany’s DAX and France’s CAC-40 were down 0.59 percent and 0.82 percent respectively.
As for the other precious metals, Comex silver for December delivery was up 17.0 cents at $17.515 per ounce. Trade has ranged from $17.435 to $17.525.
Platinum futures for January delivery on the Nymex were up $11.70 at $1,272.90 per ounce, while the most-actively traded palladium contract was at $979.00, up $11.05.
“Besides gold, platinum and palladium in particular have recovered recently. Short positions in both industrial precious metals were doubtless covered,” Commerzbank said.
