Gold Finished Lower on the Day, Higher on the Week

Gold Finished Lower on the Day, Higher on the Week


Gold ended lower Friday, but finished higher for a 3rd week running

Drivers for gold have included global growth in negative interest rate bonds, the decline in real interest rates in the US, plus uncertainty regarding US-China trade policy and political unrest in Hong Kong.

But, with bonds and gold overbought and bullish speculative positions at extremes last week, gold may be in for a pause to refresh.

Gold for December delivery GCZ19, -0.50%  on COMEX fell $7.60, or 0.5%, to settle at $1,523.60 oz after settling at $1,531.20 Thursday, the highest most-active contract settlement since April 2013.

September silver SIU19, -0.75%  lost 9.2c, or 0.5%, to $17.122 oz + 1.1% for the week.

Gold settled 1% higher for the week and have rallied 6% so far in August, according to FactSet Data.

An intensifying US-China trade dispute and growing worries over the global economy saw investors pile into safe-haven assets. The related rally in US Treasuries, sending down yields, further reinforced gains for gold by reducing the opportunity cost of holding the metal.

US consumer sentiment data Friday, which revealed a decline to 92.1 in August from 98.4, failed to provide support for safe haven gold. 

July US housing starts fell 4% to an seasonally adjusted annual rate of 1.19-M, but building permits rose 8.4% to 1.34-M.

Taking a look at the bigger picture

Central banks have been adding to their reserves for some time and the official sector at large has favored the precious Yellow metal, among other things, amid de-dollarization efforts.

Trade dispute worries and other risks make the desire more acute in some regions, but most central banks look for the official sector to hold the same or more gold over the next year according to a World Gold Council (WGC) survey.

“Overall, we remain of the view that official sector buying should remain robust and surpass the 500 tonne level again this year. We view the sector as arguably more supportive for sustainable gains in sentiment than simply tightening supply and demand fundamentals, but in any case it looks very supportive.”

In other precious metals trade

October platinum PLV19, +1.16%  rose $9.50, or 1.1%, to $851.50 oz, with prices suffering weekly decline of 1.4%.

September palladium PAU19, +0.18%  rose $2.70, or 0.2%, to $1,441.30 oz, for a 1.6% rise on the week.

Exchange-traded fund SPDR Gold Shares GLD, fell 0.6% in Friday dealings, paring its weekly loss to around 1.1%.

Have a terrific, supply, demand,

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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