Gold price steadies after volatile trading
The price of gold has remained steady so far in today’s trading following sharp volatility over the past two sessions. The precious metal fell from a 12-week high yesterday as a selloff in commodities offset safe haven demand amid fears of a global economic downturn.
Gold for immediate delivery was virtually unchanged, down $1.16, or less than 0.1 percent, at $1,227.46 as of 09:23 GMT and was trading 2.7 percent above its 50-day simple moving average of $1,195.10. The precious metal ended the previous session 0.12 percent lower, having hit a three-month intraday high earlier during the day before giving back the gains. Reuters quoted Jason Cerisola, a metals dealer at MKS Group, as saying: “Gold has now tested $1,245 three times and failed on each occasion. We believe gold could test $1,215-20 in the coming days”.
Disappointing US retail sales data and a weaker dollar that would have typically boosted safe-haven bids failed to offset the bearish mood towards commodities. Yesterday, the precious metal was sold off along with copper, which slid to a 5-1/2 year low after the World Bank lowered its global growth forecasts for 2015 and next year due to disappointing prospects in the euro zone, Japan and some major emerging economies. The Bullion Desk quoted HSBC Securities analyst James Steel as saying:
“We believe initial liquidation kicked off declines and the washout was made worse by the slide in equity prices and a reassessment of US economic vigour. We do not detect any notable change in the underlying supply/demand fundamentals which we believe are bullish, based in large part on wide production/consumption deficit”.
On the COMEX in New York, gold for February delivery was down 0.11 percent as of 09:07 GMT. According to a note from Li Zibo, an analyst at Beijing Capital Futures Co., cited by Bloomberg, gold is “benefiting from risk aversion in other markets on global growth concerns […] Further out, we still believe that a stronger dollar driven by differentiation in US and Europe monetary policies will put gold on the defensive.”