• Gold was largely unchanged on Wednesday after falling over one percent in the previous session on hawkish comments from U.S. Federal Reserve Chair Janet Yellen, while lingering North Korea worries supported prices.
Spot gold inched 0.1 percent higher to $1,294.89 per ounce at 0425 GMT. In the previous session, prices fell 1.3 percent in what was the biggest loss in over two weeks. U.S. gold futures for December delivery fell 0.3 percent to $1,297.80 per ounce.
• ”Gold lost what it gained on North Korea (tensions) since Friday after Yellen’s comments, said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.
“But I think the (North Korea) situation is more serious than the Fed’s policies. So, gold is supported around here and I expect prices to go back up to $1,300an ounce.”
• “The wild card, as usual, is the North Korea situation, something that is very hard to quantify at this stage,” INTL FCStone analyst Edward Meir said in a note
• The dollar climbed to a one-month high and bond yields rose as risks grew for a U.S. interest rate hike in December, while Asian stocks hovered near multi-week lows as tensions in the Korean peninsula remain elevated.
• The biggest focus for the market for Wednesday is the announcement of a tax plan by the U.S. administration and Republicans in Congress.
• Among other precious metals, silver rose 0.3 percent to $16.82 per ounce. In the previous session, prices fell 2.4 percent, their biggest fall since mid-August
• A resurgent U.S. dollar has pushed gold back down to around $1,300 an ounce one day after the metal had poked back above, says Lukman Otunuga, research analyst at FXTM. “The volatile combination of renewed geopolitical tensions and fluctuating rate-hike expectations [has] made gold a battleground for bulls and bears, which can be reflected in the erratic price action,” the analyst says. Otunuga later adds, “Sellers seem to be making a move, with a breakdown back below $1,300 encouraging a further decline towards $1,280.”.
• Some of the weakness in gold is likely no more than profit-taking ahead of the approaching end of the month and quarter, says Sean Lusk, director of commercial hedging with Walsh Trading.
• “Gold may continue to remain speculative short term and under the influence of traders who believe the precious metal may not be ready for a recovery to highs seen in early September,” Yaron Mazor, senior analyst at SuperTraderTV, said in an FX Empire post.
To Mazor, the metal’s price will continue to be driven by speculators over the short term.
“Gold could continue to be rattled by investors who are buying riskier assets as global equity Indexes have climbed. And strong equities may continue to create some pressure for gold traders,” he wrote.
• According to his analysis, the $1,295 level will remain as key support for the metal, while resistance lies in the $1,315 area.
• “Although we continue to like gold and remain impressed by its mid-term trend, the precious metal may continue to find tests in the near term,” Mazor said.
Reference: Reuters,Kitco
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