Gold recovered almost $11 in the Asian session as traders took advantage of the low prices to buy up the cheap metal. Gold is trading at 1252.55 at this time. Silver also gained 277 points to trade at 20.203 climbing on cues from gold. Institutional and ETFs continue to unload the shiny metal at a strong pace, prompted by the need to book higher profits before the end of the year and gold seems set to remain close its current level. With geopolitical tensions easing after the deal with Iran and signs of a global recovery traders are moving strongly into equities and other assets. SPDR Gold Trust GLD said its holding fell by 0.39% to 848.91 tones on Monday while India’s export of gold jewelry tumbled by 7% in October as government restrictions continued to hit imports and the trend is likely to continue for the rest of the year. A slight up-tick in physical demand from the world’s second largest gold consumer- China and a weak US dollar may have supported the commodity prices to certain extent in the global market. US gold prices in the global market rose from a four month low and were seen trading almost at a week high. The yellow metal prices edged up on up-tick in physical, option related demand and short covering. Comex gold futures for December delivery on electronic platform was seen trading with a gain of $10.4 at $1251.
Gold fell 25% in 2013 and turned bearish. Investors sold their holdings from Exchange Traded Funds at a record level on concerns that US Central Bank may start tapering its monetary stimulus on improving economic conditions in the US.
A list of US data releases is scheduled for the day and traders may get further clues for their trading from the data released.
- US Building Permits, Housing Starts
- US House Price Index
- Conference Board (CB) Consumer Confidence
- The Richmond Manufacturing Index
Yesterday the US Pending Home Sales Index, a forward-looking indicator based on contract signings, slipped 0.6 percent to 102.1 in October from an upwardly revised 102.7 in September, and is 1.6 percent below October 2012 when it was 103.8. The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings, according to the data released by the National Association of Realtors on Monday.
Base metals traded on a negative note yesterday on the back of decline in US pending home sales data. Also, strength in the DX coupled with weak global market sentiments in the later part of the trade acted as negative factor. However, speculation that a drop in oil prices will boost economic growth thereby, leading to a rise in demand for the base metals. Also, decline in LME inventories of all the base metals restricted sharp negative movement in prices of the base metals. Copper gave back a few pips this morning to trade at 3.226 well above last week’s trading range. Copper gained 0.1 percent yesterday on the back of decline in inventories by 0.4 percent to 437,500 tonnes. However, weak global market sentiments in the later part of the trade along with strength in the DX capped sharp gains in prices of the red metal.