Precious Metals Market Report
Friday 4 August, 2017
Fundamentals and News*
Gold Demand Hits Two-Year Low as ETF Buying Slows From High
Global gold demand dropped to a two-year low in the second quarter as reduced investment in exchange-traded products outweighed higher jewelry and bar purchases. Bullion futures fell.
Total demand slipped 10 percent from a year earlier to 953.4 metric tons, the lowest since the second quarter of 2015, the World Gold Council said in a report Thursday. The decline was almost entirely due to ETF investors, who cut buying by 76 percent from last year’s high level
“It was always going to be hard to match last year’s demand, simply because ETF buying was so strong,” said Alistair Hewitt, head of market intelligence at the London-based council. “Demand was more balanced in this quarter, and spread across several sectors including ETFs, the jewelry market and central-bank buying.”
Gold futures for December delivery slipped 0.3 percent to settle at $1,274.40 an ounce at 1:36 p.m. on the Comex in New York. Bullion for immediate delivery added 0.2 percent $1,268.60 This year’s slowdown in bullion-backed funds contrasts with improved demand for other gold products, which has helped push prices up by 11 percent. ETF sentiment soured further in July, with holdings falling for the first time in seven months, data compiled by Bloomberg show. Looking ahead, the council said U.S. monetary policy and the monsoon’s impact on Indian gold demand will be among the metal’s key drivers.
Global consumption may total 4,200 to 4,300 tons this year, down as much as 3 percent from last year, Hewitt said. China will buy 850 to 950 tons, 50 tons less than previously forecast, while Indian purchases will be at the upper end of the council’s 650 to 750 ton range.
Second-quarter figures from the report include:
Jewelry demand +8% to 480.8 tons. o 41% increase in India offset declines in China.
Bar and coin purchases +13% to 240.8 tons.
ETF investment -76% to 56 tons.
Central-bank buying +20% to 94.5 tons.
Total supply -8% to 1,065.9 tons on lower recycling.
The increase in bar and coin demand was driven by India, China and Turkey, while consumption was flat in Europe and slumped by almost two-thirds in the U.S.
“U.S. bar and coin demand was extremely weak,” Hewitt said. “A range-boundgold market just didn’t compare with the excitement in equities.”
Silver futures also fell on the Comex
Platinum futures gained on the New York Mercantile Exchange, while palladium slipped
(*source Bloomberg)
Data – Forthcoming Release
Technical Outlook and Commentary: Gold
Gold for Spot delivery was closed at $1268.6 an ounce; with little change of $1.95 or 0.15percent at 1.00 a.m. Dubai time closing, from its previous close of $1266.65
Spot Gold technically seems having resistance levels at 1273.1 and 1277.2 respectively, while the supports are seen at $1260.0 and 1256 respectively.
Technical Outlook and Commentary: Silver
Silver for Spot delivery was closed at $16.65 with the gain of $0.07 or 0.42 percent at 1.00 a.m. Dubai time closing, from its previous close of $16.58
The Fibonacci levels on chart are showing resistance at $16.87 and $16.99 while the supports are seen at $16.49and $ 16.37 respectively.
Resistance and Support Levels
Indications only, open & closing prices are bids; data source: Bloomberg; important disclaimer below; Times as per Dubai
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