BERN: Gold prices have dropped further on Wednesday’s morning session despite a weaker dollar while physicals demand remained stagnant.
Spot gold prices moved down to $1,094/1,094.8 per ounce, down $8.5 from yesterday’s close despite a weaker dollar – dollar index nudged down to 97.27, down 0.07 from yesterday. “The precious complex continues to be under pressure following Mondays sharp sell-off,” said MKS PAMP Group. “Gold looks to be decoupled from currencies with the metal playing its own game to the downside.”
Overnight, the Dow Jones industrial average and S&P were down 1.2 percent and 0.6 percent respectively. In equities, key Asian stock indexes were down on Wednesday morning – CSI300 dropped 0.66 percent to 4,138.65, down more than 6.81 percent month-on-month (MOM). Hang Seng Index declined 1.17 percent to 25,236.85 while NIKKEI 225 nudged down 1.14 percent to 20,603.43. Swiss customs data showed that gold outflows in June were at lowest level since August 2014 at 98.5 tonnes.
“Physical demand showed little sign of picking up. The Shanghai Gold Exchange premium over loco London remained soft over the past 48 hours, at around USD2.0/oz,” said ANZ. “Normally, we would expect a decline of such magnitude to elicit fresh demand from China but that seems to be lacking, at least in the onshore premium.”
In other metals, spot silver was last at $14.73/14.78 per ounce, down 0.08. Platinum was still trading below $1,000 per ounce, last at $964/969 fell $9. Palladium nudged down $6 to $616/622. Today, market awaits Bank of England’s monetary policy committee meeting, existing home sales and crude oil inventories in the US. On the Shanghai Futures Exchange (SHFE), gold for December delivery nudged down to 220.55 from 223 yuan per gram.
