GOLD PRICES eased but held 90% of Friday’s $30 jump in London trade Monday, sitting above $1135 per ounce as world stock markets extended the strong rebound in New York equities following last week’s surprisingly weak US jobs data.
Japan’s Nikkei added 1.8% and France’s CAC40 rose 3.5%, while silver jumped ahead of gold prices again, adding another 35 cents to Friday’s sudden 80c move to reach 6-week highs above $15.60 per ounce.
“The Fed’s credibility is at stake if it fails to move on interest rates this year,” says Mitsubishi Corp’s precious metals analyst Jonathan Butler, noting that the US central bank has “spent the past two years preparing the markets.
“As such, Q4 could be a difficult one for precious metals if rate rises are priced in.”
The chances of a US rate hike by December “have dwindled”, says French investment bank and bullion market maker Societe Generale, now putting the odds of a delay until March 2016 at 50-50.
But for gold prices – and with traders in No.1 consumer market China on holiday until Thursday – “physical demand has been muted so far,” SocGen goes on.
“The mood is rather to sell into price-strength until the broader sentiment towards gold improves.”
More banking executives “should have gone to jail”
, former US Fed chair Ben Bernanke told USAToday
on Monday, blaming them for causing what it calls the Great Recession of 2008-2011.
Looking at today’s gold price charts, “From a technical perspective,” says a note from ICBC Standard Bank’s commodities team, “Friday’s bounce slowed the downward momentum in gold but a close above $1148 is needed to turn the outlook more positive.
“A move up through $1160 would break a weekly downtrend stretching back to mid-2012 and open the way to $1200.”