Dealing Desk: Gold held back by US Data and Stronger US Dollar

This week, clients have been net buying gold and silver, taking advantage of the lower prices due to the FOMC announcement last Friday.

Week on week, we have continued to see a high volume of orders including higher volume orders. Goldmoney Wealth’s clients have favoured the London, Swiss, and Singapore vaults this week with less preference being shown for the Hong Kong and Canada vaults.

Kelly-Ann Kearsey, Dealing Manager at Goldmoney Wealth said the main focus of this week was the statement released by the Fed which has been interpreted as having a hawkish tone. Based on this, the precious metal prices have retreated, with gold reaching a two month low on Wednesday. The drop in price has been further encouraged by a firming US dollar and the dollar index reaching a 3-week high after US jobs data released was better than expected.

The prices began to recover this afternoon, UK time, as the ISM Manufacturing figures were released. The figures were expected to remain steady at 52.2; however, they dropped to 49.4, suggesting more support for the precious metals. After this release, the gold price sprung back to a spot high of $1,315.06/oz along with silver reaching a spot high of $18.88/oz.

The market will now be looking to Friday’s US nonfarm Payrolls report for August. If strong figures are released, it could support the FOMC for its expectations of a rate rise; however, weaker than expected figures may help provide more support for the metals.

Week on week, given the price decrease, silver outperformed the other metals by gaining 1.1% on the spot price. This has amended the gold to silver ratio down to 70.

01/09/16 16:00. Gold dropped 0.6% to $1,313.78, Silver increased 1.1% to $18.79, Platinum declined 2.9% to $1,046.80 and Palladium fell 2.9% to $662.00 Gold/Silver ratio: 70

NOTES TO EDITOR
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Goldmoney
Goldmoney is one of the world’s leading providers of physical gold, silver, platinum and palladium for private and corporate customers, allowing users to buy precious metals online. The easy to use website makes investing in gold and other precious metals accessible 24/7.
Through Goldmoney’s non-bank vault operators, physical precious metals can be stored worldwide, outside of the banking system in the UK, Switzerland, Hong Kong, Singapore and Canada. Goldmoney partners with Brink’s, Loomis International (formerly Via Mat), Malca-Amit, G4S and Rhenus Logistics. Storage fees are highly competitive and there is also the option of having metal delivered.
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