Singapore 26/02/2014 – Gold was on its fourth day of winning streak, continuing to rally on safe haven bids as US data seem to suggest the economy is not on such a steady path as previously thought. Buying on safety was obvious, as silver and palladium  failed to follow gold  higher, straying from the typical correlation the precious metals complex has with gold.

In US data releases, the Richmond manufacturing index fell to -6 against a forecast 13 and from the previous 12, while the CB consumer confidence index was also below forecast at 78.1 – a reading of 80.2 had been anticipated.

Elsewhere, the situation in Ukraine is also leading investors to buy into gold. “Gold price continued to rise and chalk up higher prices since 21 February as investors remain cautious towards the developments in Ukraine which still threatens to plunge the country into a sovereign default,” economists at UOB in Singapore said.

In gold’s price movements, spot gold traded up close to $6 to $1,341.25; prices are still close to its 4-month highs at the current $1,340.50 per ounce. Silver  however did not follow gold higher but fell 10 cents to $21.85 per ounce on Tuesday, and now hovers at $21.87.

Further, bullion on the Shanghai Gold Exchange has moved to a discount as yuan slipped to its lowest in three years, indicating that perhaps, the recent run of higher gold prices has dampened Chinese buyer’s appetite for gold.

“There is historically a negative correlation between changes in Bullion’s premium on the SGE and changes in the gold price itself…as Chinese buyers often accumulate gold during periods of steep price declines and have refrained from buying during periods of rallies. Consequently, it does not surprise us that demand from China has slowed,” said analyst James Steel from HSBC Securities.

Palladium gained $5 on Tuesday to $1,439 per ounce but prices have come back down today to $1,436 per ounce.Palladium failed to follow gold higher as well, falling $4 on the day to $738 and continued to slump $5 today to the current $733.

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