The week was volatile for gold. Gold acted weak on Monday but later picked momentum by the end of the week, ultimately closing the week higher and notching a third straight week of gains.
On Monday, gold prices ended slightly lower and pulled back from the positive gains witnessed last Friday. A stronger US dollar weakened the gold and silver markets. But later in the week gold managed to rise above $1200 even though the dollar gained.
George Gero, vice president with RBC Capital Markets Global Futures, said gold attracted some buying when it rebounded over $1,200. Few other news that moved the market:
- China: In order to fuel the slow moving Chinese economy, China’s central bank reduced its interest rate. Chinese economic data in the past has been disappointing. This move by the China central bank comes as a bullish factor for gold.
- European Central bank: The statement released by ECB president Mario Draghi made it very clear that the ECB will use all means within the ECB’s mandate to return the EU to its inflation target, including implementing quantitative easing and this he said will happen soon.
- Gold Buying: European and Russian central banks were looking to acquire more gold.The Dutch Central Bank says it has recently shipped 122.5 tons of gold worth around 4 billion Euros ($5 billion) from safekeeping in New York back to its headquarters in Amsterdam. With this move the Dutch Central Bank has joined the bandwagon along with other banks that are keeping a larger share of their gold supply in their own country. This boosts demand for gold and gives a positive outlook for the yellow metal.
Gold futures climbed to a two-week high topping $1,200 an ounce after Russia added to reserves, fueling speculation that a rebound in demand for bars, coins and jewellery will help stem this year’s drop.
The gold market has a lot in basket to be seen in the next week.
- There is a major meeting of the Organisation of Petroleum Exporting Countries, inflation data out of the euro zone, and a major holiday in the U.S. to keep volatility high.
- Swiss Referendum- The market may also see some last-minute positioning ahead of the Nov. 30 Swiss gold referendum. Traders are also already discussing next week’s Swiss referendum which would require the Swiss National Bank to hold 20% of its assets in gold. A Swiss poll on Wednesday showed the majority of voters were not in favour of the measure. This news was credited in part with weakness in the gold market Wednesday. This can be a game-changer worldwide. If the Swiss franc stops falling and starts rising because of this then more people will understand that a strong currency is good not a weak currency.
- November Germany IFO business climate
- The November U.S. consumer confidence index
- the October U.S. Core PCE price index and personal spending
- the Euro zone private sector loans,
- the October Japan inflation data,
- Later in the week, analysts said they’ll watch to see what euro zone inflation data shows. Inflation has remained tame, which doesn’t support gold, analysts said, and euro zone inflation has been particularly soft.
|GOLD||$1180-$1215 per ounce||Rs.26,250-Rs.27,000 per 10gm|
|SILVER||$16.00- $17.50 per ounce||Rs.35,000- Rs.39,000 per kg|