In Commodity News 09/01/2016
Gold trimmed its biggest weekly advance since August as China’s move to halt a rout in stocks calmed global markets and cut demand for a haven. Palladium rose from a five-year low.
Bullion futures ended the biggest five-day rally in almost a year as Chinese authorities suspended a controversial circuit-breaker system, set a higher yuan reference rate and directed state-controlled funds to buy shares. The metal fell from a two-month high as a stronger dollar also reduced demand for an alternative investment before U.S. jobs data due later Friday.
“Calmer markets in China and stabilization in the yuan have resulted in gold longs taking profit,” Georgette Boele, an Amsterdam-based analyst at ABN Amro Bank NV, said by e-mail. “Palladium recovered on the same dynamics.”
Gold for delivery in February fell 0.6 percent to $1,100.70 an ounce by 7:28 a.m. on the Comex in New York. Prices jumped 4.5 percent in the previous five sessions, the most since January last year.
The metal has outperformed other commodities this week as more than $4 trillion was erased from global equities. Investors bought the most through bullion-backed funds in almost three weeks on Thursday, lifting assets from the lowest since 2009. Holdings and prices dropped in the past three years as expectations of tighter U.S. monetary policy cut the appeal of precious metals.
Technical Levels
After rising above its 50-day moving average on Wednesday for the first time since November, gold failed to remain above the 100-day level after earlier Friday breaching it for the first time in two months.
“After a remarkable run this week on safe-haven inspired buying, bullion is running into technical resistance,” said Jonathan Butler, a precious metals strategist at Mitsubishi Corp. in London. “Gold came off after hitting the 100-day moving average this morning.”
The shares of South African gold miners trimmed the biggest weekly advance in a month. They surged the previous four days as a weaker rand sent gold priced in the currency to a record. Harmony Gold Mining Co. fell 7 percent in Johannesburg, cutting its weekly rally to 40 percent.
Silver futures retreated 2.1 percent to $14.05 an ounce, reducing this week’s gain to 1.5 percent. Platinum was little changed and palladium rose 1.4 percent to $500 an ounce. The metal is down 11 percent this week, the most since mid-November.
Source: Bloomberg
