Gold Price Happy October's Over

Over in India, they can’t seem to sustain the expected buying power we usually see this time of year. Last week signs of physical gold bullion retail sales increased, however this week the rupee has weakened and orders to buy gold bullion seem to be back on ‘pause’. Commentaries in Indian newspapers are beginning to appear wondering if Indian’s should sever their link with gold on the back of its poor price performance this month. It seems their mainstream media is picking up a few tips from ours instead of looking at the gold price’s overall performance in the last year, in fact in the last decade.

Fall In Gold Price Tempered
Whilst the gold price is set to record its first monthly loss since May, the fall of 3.4% this month is tempered compared to what many analysts had expected. This is thanks to the holdings in gold-backed exchange traded products reaching record highs and the weakening of the dollar.

Hurricane Sandy continued to wreak havoc yesterday, not just on the ground but in the markets as well; the dollar index fell by the highest amount in two weeks yesterday as fears regarding the damage caused by the storm subsided somewhat on the back of news damage will be less severe than predicted.

Gold and silver bullion contracts for December delivery on the Comex were also affected by the storm as, according to Bloomberg, aggregate volumes fell to half those traded on October 26, yesterday. Silver for December delivery was up 0.35%, gold up 0.03%.

The weakening of the U.S. Dollar is good for gold and will provide some support. This morning it has already begun to climb in price, however significant gains or losses are not expected as investors await the U.S. jobs data on Friday and the U.S. election results.

Appetite For Risk? See Euro zone
The Euro received a little boost yesterday as Spanish Q3 GDP shrunk 0.1% less than expected, to just 0.3%. Despite some investors showing an appetite for risk in Europe, the fact remains that the country is slipping deeper into recession whilst inflation also increases prompting concerns of stagflation.

Germany also showed some vaguely positive signs yesterday, employment continued to increase in September however, looking at unemployment growth signals the jobs market is losing momentum. This morning retail (MoM) are showing some signs of improvement, however YoY retail sales have fallen by 3.1%.

Europeans Vote Obama
Interest on this side of the Atlantic in the U.S. election is hotting up with some interesting survey and poll results out. Considering the U.S. polls are suggesting the next week’s presidential election will be a close-run thing, it’s not the case over here. Obama might be wishing he was running for the EU presidency (oh, hang on, we don’t vote for that) as he would be celebrating already. YouGov has found that of seven countries surveyed, 90% of voters would pick Obama. Suggesting our media is possibly just as unbalanced as those countries we like to invade occasionally.

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