Gold: “A positive sign”

The price of gold is slightly lower at the beginning of the week: Yesterday afternoon the troy ounce was trading at 1,510.38 dollars. In view of the news situation, the precious metal continues to present itself strong. The latest statements from the USA and China give rise to hopes that a partial trade agreement is within reach. The fear of further punitive tariffs would then be off the table for the time being. This is boosting the stock markets and is actually rather negative for the gold price.

 

“It is a positive sign that investors are not turning their backs more strongly on gold,” says Eugen Weinberg, Head of Commodity Analysis at Commerzbank. “After all, speculative net long positions are still at a comparatively high level. In the week ending October 29, they even rose again to just under 200,000 contracts, which corresponds to almost 620 tonnes of paper gold,” Weinberg continued. However, Weinberg warns that this also means considerable selling potential if speculative investors change their mind about gold.

 

However, little support can be expected from Asia for the gold price. “According to an unnamed government official, India’s gold imports in October were only 38 tonnes, 33 percent lower than last year. According to Weinberg, this indicates restrained demand during the Hindu holidays of Dhantera and Diwali at the end of October.

Today, the World Gold Council publishes data for the third quarter. These should, according to Weinberg, confirm that gold demand in the third quarter was mainly driven by investment demand in the form of ETF inflows and central bank purchases.