by Vivian Teo
The gold price stayed resilient making slight gains during Asian trading hours on Thursday as global economic concerns remained despite an overnight rebound in risk assets.
Spot gold was last at $1,208.40-1,208.70 per ounce, up $1.60 from Wednesday’s close. Trading ranged at $1,206.70-1,210 so far.
“Risk sentiment seems to be improving, also supported by better-than-expected industrial production numbers in the US. However, there are indications that the recovery could still be quite fragile,” said Credit Suisse in a Thursday report. The indications include mixed performances among various regions’ stock markets and fixed income markets.
And while oil prices increased on news that Iran might join the Saudi Arabian-Russian deal to freeze oil output, gold prices also increased, the bank noted.
“This could be a warning sign, as gold prices have in fact moved in tandem with risk sentiment over the last few weeks, it added.
Iran’s oil minister had welcomed the prospect of cooperation between oil producing countries, though he did not say whether Iran would join in a production freeze.
Russia, Saudi Arabia, Venezuela and Qatar had said earlier this week that they would freeze oil output at January levels as long as other producers also participate.
The Brent crude spot price traded above the $34 per barrel-level so far on Thursday – it was last at $34.85 – compared to a low of $31.79 on Wednesday.
The Texas light sweet crude started trading at above $31 per barrel on Thursday – recently at $31.24 – relative to a low of $28.71 on Wednesday.
In data released Thursday, China’s January CPI came in at 1.6 percent, close to forecast of 1.7 percent and higher than December’s 1.5 percent.
China’s January PPI showed a 5.3 percent decline, a gentler decline than the forecasted -5.5 percent and December’s 5.9 percent fall. January was the 47th straight month of decline, however.
In US data released Wednesday, building permits in January were 1.2 million, a touch below the forecast of 1.21 million.
PPI and Core PPI month-over-month were up 0.1 percent and 0.4 percent respectively, both missing the estimates of -0.2 percent and 0.1 percent.
Housing starts in January came in at 1.10 million, a stark divergence from the economic consensus of 1.16 million.
Capacity utilization rate in January was at 77.1 percent, above the projection of 76.7 percent. Industrial production month-over-month in January rose 0.9 percent, besting the estimate of a 0.3 percent gain.
Other US data due later on Thursday includes the Philly Fed manufacturing index, unemployment claims, CB leading index and natural gas storage.
Market reactions to the Federal Reserve minutes from its January meeting released overnight were muted given that the tone was similar to its statement in January and that it comes after two recent speeches by Fed chairwoman Janet Yellen.
“Participants judged that the overall implications of these developments for the outlook for domestic economic activity was unclear but they agreed that uncertainty had increased,” the minutes from the January 26-27 Federal Reserve meeting said. “Many saw these developments as increasing the downside risks to the outlook.”
In equities, the Dow Jones Industrial Average finished 1.59 percent higher at 16,453.83 on Wednesday, while the Shanghai Composite is up 0.03 percent to 2,868.248 so far on Thursday.
In currencies, the US dollar index was last at 96.76 on Thursday, down 0.18 percent from the previous day’s close.
In other precious metals, silver rose $0.03 to $15.285/15.305 recently. Platinum was up $3 to $941/946, while palladium increased $2 to $512/518 so far on Thursday.
On the Shanghai Futures Exchange, gold for June delivery was unchanged at 245.80 yuan per gram, while June silver was flat at 3,460 yuan per kilogram.
(Additional reporting by Dalton Barker)
