by Vivian Teo
The gold price fell during Asian trading hours on Friday after rallying overnight to a week’s high of $1,240.10 per ounce. But market participants see the yellow metal remaining well-supported on global economic uncertainty.
Spot gold was last at $1,226.70-1,227 per ounce, down $3.80 from Thursday’s close. Trading ranged at $1,225-1,232.40 so far.
The gold price had rallied overnight following a pull-back in US equities and weaker oil prices.
“In recent weeks the markets have become more concerned about the state of the global economy and the risk of debt default and equity weakness, hence the pick-up in the buying of safe havens,” said William Adams, head of research at FastMarkets.
“We remain bullish of gold but prices may need more consolidation in the short term…We expect dips to be well supported,” he added.
Crude oil prices were unchanged-to-weaker overnight having given up early trading gains after Energy Information Administration data showed US crude stockpiles climbing 2.15 million barrels last week on rising imports, said ANZ Research on Friday morning.
The oil price rally also halted after Saudi Arabia’s foreign minister was reported as saying that Saudi Arabia was “not prepared” to cut production, scuttling hopes of a deal by major producers to cut output in an oversupplied market.
Oil prices had risen more than 14 percent this week after Saudi Arabia, Russia, Venezuela and Qatar said they would freeze oil output at January levels as long as other producers also participate. Iran’s oil minister had welcomed the plan but did not commit to it.
The Brent crude spot price slipped below the $34 per barrel-level and was last unchanged at $33.97 on Friday. The Texas light sweet crude spot price also fell below $31 per barrel on Friday – recently at $30.51 – up 0.03 percent so far.
Global economic growth remains fragile with the Organisation for Economic Cooperation and Development (OECD) cutting its global growth forecast on Thursday by 0.3 percent to three percent for 2016 as it warns of slowing economies in Brazil, Germany and the US, and exchange rate volatility in some emerging markets.
“Financial stability risks are substantial. Some emerging markets are particularly vulnerable to sharp exchange-rate movements and the effects of high domestic debt,” the OECD said in its Thursday report.
Major economic data released on Thursday was mixed with a slight negative bias. China’s January PPI was -5.3 percent, a gentler decline than the forecast -5.5 percent and December’s -5.9 percent. January was the 47th straight month of decline, however.
Weekly US unemployment claims came in at 262,000, below the forecast of 275,000 and under the psychological 300,000 mark. The Philly Fed manufacturing index for February at -2.8 was close to the -2.9 estimate.
But the US CB leading index disappointed at -0.2 percent against a forecast of -0.1 percent. Data due later on Friday includes US CPI and core CPI, along with Eurozone consumer confidence.
In equities, the Dow Jones Industrial Average finished 0.25 percent lower at 16,413.43 on Thursday, while the Shanghai Composite was down 0.03 percent to 2,861.966 so far on Friday.
In currencies, the US dollar index was last at 96.75 on Friday, down 0.1 percent from the previous day’s close.
In other precious metals, silver slipped $0.037 to $15.365/15.39 recently. Platinum was up $2 to $942/947, while palladium increased $2 to $500/506 so far on Friday.
On the Shanghai Futures Exchange, gold for June delivery was unchanged at 258.20 yuan per gram, while June silver was flat at 3,474 yuan per kilogram.
