Gold Soars Close to 1700

Gold Soars Close to 1700
Gold Soars Close to 1700
Early morning the Chinese industrial production, retail sales and GDP data all turned out to be higher and supported optimism in riskier assets including base metals. The Asian equities have braced the positive news supported by better US equities performance yesterday. Precious metals prices climbed to one month high yesterday as a weak reading on Philly Fed manufacturing underlined the view that U.S. growth may not be robust enough for the Federal Reserve to pull back on its accommodative monetary policy. Gold climbed to trade at 1690.00 yesterday and this morning has given back a few dollars to trade at 1687.75. Silver did not follow suit but Platinum soared.

China’s Gross Domestic Product (GDP) rose by 7.9 percent in Q4 of 2012 as against a previous rise of 7.4 percent in Q3 of 2012. Fixed Asset Investment was at 20.6 percent in December from 20.7 percent in November. Industrial Production grew by 10.3 percent in December as compared to rise of 10.1 percent a month ago. Retail Sales increased by 15.2 percent in December with respect to earlier rise of 14.9 percent in prior month

Persistent concerns over the health of the U.S. economy and pressure on the dollar will send gold prices to a record average high this year; Thomson Reuters GFMS said on Wednesday, before the metal’s 12- year bull run tops out late in the year. Ongoing negotiations over the debt ceiling and budget and spending cuts continue to weigh on traders, as no progress seems to be made. Negotiations seem to be following the same course as they did at the end of December, with lawmakers, pushing off decisions until the last moment and hastily passing a bill to postpone most of the tough decisions. Treasure Secretary Geithner says that he is using “extraordinary measures” to continue to fund the government. On the flip side, US data continues to print on the positive side, with unemployment claims declining and new housing starts climbing to recent highs. The Federal Reserve Beige Book showed the economy expanding cautiously.

Gold climbed due to higher physical demand from Asia and as dollar eased after positive US data which supported gold. Gold was also supported ahead of the BOJ policy meet which is expected to take bold steps for monetary easing

Gold in India is expected move in a range as a stronger rupee can put pressure on gold prices while expectations for duty hike and bargain prices can lead to fresh buying. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,332.61 tons, as on Jan 17. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 10,734.99 tons, as on Jan 16.

The dollar index, which measures the US unit against a basket of six major currencies, slipped to 79.691.

Gold is expected to remain in a tight range for the rest of the day with little eco data due and the main event, which was David Cameron’s address on the relationship between the UK and the EU has been postponed as global ministers prepare a joint statement on the Algerian terrorist attack of a gas facility.

Leave a Reply

Your email address will not be published. Required fields are marked *