Equityworld Futures : The price of gold ended flat at the end of the weekend trade Saturday daybreak (23/10) because of increased demand from Asia offset a strong dollar, but the precious metal remains on track for a weekly increase since the week ending 30 September. The price of spot gold rose LLG 0.06 per cent at $ 1, 266.66 per ounce. On a weekly basis the price of gold rose by about 1 percent. Gold price movements are highly associated with the movement of the U.S. dollar, and on this week of weakening the U.S. dollar gold price increase support, also backed the U.S. interest rates rise in uncertainty. U.S. gold futures prices ended down at $ 1, 267.70 per ounce.
Demand for gold from Asia, including China, India and exchange traded funds (ETFS), has helped prop up prices this week. “There is a growing demand for physical gold in Asia and especially in India which has helped the prices,” said Commerzbank commodities analyst Carsten Fritsch as reported by CNBC, adding that India has improved demand after last year’s lackluster sales. However, the U.S. dollar index, which measures the greenback against a basket of currencies, rose 0.35 per cent at 98.658 after touching a high of since February on Friday.
Gold has been depressed in recent weeks by the strength of the dollar, which has been assisted by the important data that showed u.s. economic improvements that could justify a hike in interest rates this year. Higher U.S. rates increase the opportunity cost of holding non-winning assets such as gold and create investment vehicle to offer a higher yield.
Ownership of the SPDR Gold Trust, the world’s largest gold-backed ETF, rose 0.31 per cent to 970.18 tonnes on Thursday. SPDR holdings have increased by 2.3 percent so far this month. MKS PAMP Group said in a note that the ETF inflows continue to support gold. “However, the strength of the dollar will likely weigh on the move higher in the short term in the midst of the euro and the weakness of the pound.
” The euro reached seven-month low against the dollar after the European Central Bank weakened due to a decrease in asset purchase program, keeping the door open for more stimulus this year. Silver spot down 0.2 per cent to $ 17:48. Platinum down 0.4 percent at $ 930.60. Palladium was down more than 1 percent to touch a low of $ 621.50, the worst since July 13.
Analyst Equity Research Center estimated the price of gold on the next trade potentially weak stressed the strengthening of the U.S. dollar and the rise of the sentiment of Hillary Clinton’s victory over Donald Trump in the debate of the U.S. presidential candidates. The price is estimated to be moving in the range of $ 1.265 Support-$ 1.263, whereas if the price goes up would move in a range of Resistance of $ 1.269-$ 1.271