Today’s AM fix was USD 1,206.50, EUR 975.98 and GBP 770.98 per ounce.
Yesterday’s AM fix was USD 1,195.25, EUR 975.48 and GBP 766.73 per ounce.
Spot gold rose 0.2% to $1,206.80/oz in late morning trade in London today.
Gold in EUR - 2014 YTD (Thomson Reuters)
Gold rose for a second day today, to trade back above $1,200 an ounce, as the U.S. dollar gave up early gains and Asian and European stocks followed their U.S. counterparts lower.
Gold jumped 1% on Monday on technical trading and physical buying. Gold in Singapore ticked marginally lower after the gains in New York but remained above the important $1,200/oz level.
We are bearish on gold in the short term and think that we may see futures selling pressurise gold into year end as was seen at year end last year (see chart). Gold ticked higher in early December last year prior to aggressive selling in the futures market pushed prices lower from December 10th, prior to gold bottoming on the last trading day of the year.
This potential weakness may create a buying opportunity in late December prior to a sharp rally in January and February as was seen last year.
Gold in USD - 1 Year (Thomson Reuters)
Sentiment towards gold remains bearish as seen in the SPDR Gold Trust, the world's largest gold exchange-traded fund, which saw its holdings resume declines after a brief uptick and were close to six-year lows on yesterday.
A factor hurting sentiment is the recent strength in the dollar. Although, the dollar looks quite overvalued now and is due a correction which should support gold.
Since June, the dollar had begun to show weakness versus the Chinese yuan and we believe that this may be a precursor to dollar weakness in 2015, particularly in gold terms.