Gold futures dropped for the second day as gains in equities lowered the demand for the metal as a haven. Yesterday, palladium climbed heading towards a bear market.
December delivery gold declined 0.2% or $2.00 to $1,239.20 per ounce while the US stock futures pointed to a higher opening for Wall Street. The contract is headed for an advance of 1.4% for the week.
Market Watch quoted Commerzbank analysts as having said on a note on Friday, “Shored up by economic concerns on the part of market participants, gold is holding its own at around $1, 240 per troy ounce as the week draws to a close.”
They added, “The prospect of another bailout programme for Greece has also sparked higher demand for gold.”
According to Bloomberg, last week gold fell to the lowest this year on outlook for higher US borrowing costs amid economy gains.
The metal rebounded as the Federal Reserve signaled a global slowdown may delay the increase of interest rates. The prices dropped 8.4% in Q3 while equities surged to a high.
Frank McGhee, Integrated Brokerage Services LLC head dealer said in a telephone interview, “The safe-haven buying is unwinding today as the equity market has bounced back. Also, we are seeing some stronger US data.”
On October 15, the metal had hit $1,250.30, the highest price for the most active contract from September 11. On October 6, the metal hit $1,183.30, the lowest level from December 31.
There was a 2.4% climb in futures last week, the highest from June.
December delivery silver declined 0.5% or 9 cents to $17.35 per ounce. It is heading towards a 0.2%.
Platinum January delivery futures gained 0.7% to $1,261 per ounce. Marex Spectron Group head of precious metals, David Govett said, “Platinum group metals fell on the back of stock-market weakness and perceived global slowdown. Palladium, as the main element in catalytic converters, is being especially hit as the perception that car sales will drop gathers momentum.”
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