The gold price is holding strong above $1,250 this morning but it is trading in a narrow range as market participants exercise caution ahead of the non-farm data on Friday. It also fell slightly this morning as the rebound in equity markets softened demand for the yellow metal.
Gold continues to benefit from short-term flights to safety as emerging markets and global economic growth worries persist. The yellow metal is expected to benefit further on Friday when the non-farm payrolls data is released, when it is unlikely that the figures will relieve any concerns over the slowdown in the economic recovery.
The SPDR Gold Trust saw inflows of 3.89 tonnes yesterday, the first increase a week of no net-change. Last year gold ETF outflows were blamed for a significant proportion of the weak gold price.
Physical demand is, for obvious reasons, muted in China however this is also the case in other parts of Asia where weakening currencies are driving up gold prices. Markets in China are closed through to the 6th February.
Platinum price falls, despite strike
The two-week long strike in South Africa’s platinum mines continues. In the last few days we have commented that the strike has had little impact on the price of the metal. Overnight the platinum price slid somewhat, however this morning it has recovered as talks between unions and the country’s top three platinum producers resumed.
China – gold to hold steady
The Chinese Gold and Silver Exchange Society has forecast the gold price to remain stable in the first half of the year as pace of the Fed’s tapering is slow, according to Hong Kong’s Standard paper. “The price of gold would not move significantly as the pace of the Fed’s scaling down of bond buying is slow and there are uncertainties in emerging markets’ currency policies,” said Haywood Cheung Tak-hay, president of the society.
FCA to look at metals storage
The International Business Times reports this morning that UK’s FCA is looking to ‘sharpen’ its focus on the storage of commodities by banks. They believe current arrangements allows members of the LME, amongst others, to control supply by slowly releasing holdings from warehouses.
The International Business Times quotes an FCA official’s speech, ‘”Last year there was a lot of commentary over whether the current arrangements were appropriate, and we have seen recently some exchanges change their warehouse policy in response…We will seek to ensure that the impact on market integrity and orderliness is fully co-ordinated…A lot of work is going into understanding how this affects the price discovery process in the commodity markets and the signalling which future prices provide of commodity fundamentals.”
China continue to hire for gold market
Towards the end of last year we brought you a fantastic infographic on the top ten individuals who are driving China’s gold market forward. We bring you news today that the Bank of China International has recruited former Goldman Sachs metals trading chief, Stephen Branton-Speak, as an adviser to the commodities business. Interestingly, Mr Branton-Speak was on the management committee of the LBMA, something the Chinese are no doubt interested in hearing more about.