Gold price steady following Friday sell-off, platinum off lows

Author: Paul Ploumis08 Jun 2015 Last updated at 05:10:17 GMT

EDGWARE (Scrap Monster): The gold price was little-changed during Monday’s early European sessions as the market continued to come under pressure following the sell-off on Friday, when US non-farm payroll data surprised to the upside.

Spot gold was last at $1.172.60/1,173.40 per ounce and $0.70 higher on the previous day’s close. Platinum increased $1 to $1.095/1,100 having slumped under $1,100 on Friday to the lowest since March at $1,088.

“Precious metals consolidated ahead of the US employment report, but a better than expected number sent prices lower as it made a Fed rate rise more likely – this led to most of the precious metals breaking important support levels and platinum matching the March low,” FastMarkets analyst William Adams said.

The US created 280,000 new jobs in May, significantly above analysts’ estimates of 222,000 and the highest climb in jobs figures seen in months.

“The technicals of the markets have deteriorated to such an extent that they will now likely drive precious prices lower, as the theme of a stronger dollar and the imminent rise in US rates again dominates sentiment,” INTL FCStone analyst Edward Meir said.

The dollar was last at 1.1133 against the euro.

Despite continued negotiations, the Greek debt situation continued without resolution last week, raising concerns of a Grexit. In an address to the Greek parliament last Friday, Greek prime minister Alexis Tsipras called creditor plans “unrealistic” and urged them to withdraw their proposals.

“Concern over this situation has failed to propel interest in gold, and as the metal failed to attract safe-haven interest and continued its price decline,” Barclays Capital said.

Indeed, market participants said that gold has seen a distinct lack of demand.

“China has been relatively quiet this year as regards bullion demand and after strong purchases earlier in the year Indian demand has softened. This is removing a floor on prices as western investors have liquidated or gone short. Given these two countries’ commanding presence in the physical markets and their long-run price sensitivity we expect further declines will eventually encourage them back into the market.” James Steel at HSBC said.

In data, German industrial production was better-than-expected at 0.9 percent and German trade balance was also positive at 22.3B.

Elsewhere, Japan’s final GDP was positive at 1.0 percent and China’s trade balance data was positive at 59.5B

Later, the EU will release its Sentix investor confidence, while the US has labour market conditions.

Silver at $16.08/16.13 was unchanged and palladium declined $1 to $749/754.

Courtesy: www.bulliondesk.com