Gold supported as Chinese investors return

Oct 10, 2016 - 3:58 AM GMT
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The spot gold price inched higher during Asian trading hours on Monday, October 10, propped up by buying interest as Chinese investors returned after week-long national day holidays in China.

Spot gold was last at $1,260.70-1,261.15 per ounce, up $3.20 from last Friday’s close. Trading ranged at $1,256.50-1,264.30 so far on Monday.

Despite Japan and Hong Kong being on holidays, spot gold opened modestly bid during Asian trade today with expectations that China would open as a buyer following its holiday, MKS Group said in a report on Monday morning.

“We expect gold to remain buoyant, looking for support around $1,250 following Friday’s encouraging move back above the level on the less than impressive US jobs data,” the broker said.

The US jobs report released last Friday showed 156,000 Americans joining the labour market in September, below market forecast of 171,000. The previous month’s reading, however, was revised upward to 167,000 from 151,000.

US average hourly earnings were in line with projections at 0.2 percent, though the headline unemployment rate increased to 5 percent from 4.9 percent.

The payrolls report was still deemed strong enough to keep December Fed tightening expectations fairly firmly intact, National Australia Bank said on Monday morning.

The market has currently priced a 65-percent chance of a US rate hike in December, according to the CME Group FedWatch tool.

The US dollar index has softened in response to the US jobs data. The index was last at 96.55 on Monday, up 0.05 percent from its previous close, but down from as high as 97.47 last Friday – the highest since July 27.

In equities, the Shanghai Composite rose 0.8 percent to 3,028.70 recently on Monday.

In other commodities, the Brent crude oil spot price fell 0.5 percent to $51.39 per barrel, and the Texas light sweet crude oil spot price slipped 0.59 percent to $49.25 so far on Monday.

In other precious metals, silver was last at $17.64/17.66, up $1.25. Platinum rose $9.50 to $969/974, and palladium increased $13.50 to $670/677 recently on Monday.

On the Shanghai Futures Exchange, gold for December delivery was last unchanged at 273.00 yuan per gram, and the December silver was flat at 3,966 yuan per kilogram.