GOLD PRICES slipped below $1320 per ounce for the third time in two days Thursday in London, trading 1.1% down for the week so far despite escalating tensions between nuclear powers India and Pakistan as world stock markets rose after the Opec nations meeting in Algiers agreed to curb the oil cartel’s annual output by some 2%.
Only India’s stockmarket bucked the rise in equities, closing 1.5% down at a 1-month low after New Delhi said a series of “surgical strikes”
across the disputed Kashmir border with Pakistan had killed 38 terrorists and 2 Pakistani soldiers.
Silver slipped towards $19.00 per ounce as gold prices fell.
“Yen slumps as investors shun havens
following Opec accord,” said a headline on Bloomberg, as the Japanese currency fell to 1-week lows at ¥101.50 per Dollar.
Domestic Indian gold prices had earlier slipped following the Opec news according to data at Sify
. The Rupee then fell to 1-week lows as Mumbai traders reported central-bank sales of Dollars to support the currency.
Wednesday, India pulled out of November’s upcoming South Asian Association for Regional Cooperation meeting – scheduled in Islamabad – after confronting Pakistan’s envoy to New Delhi with “proofs of cross-border origins”
for September 18’s terrorist attack on Uri in Kashmir, which killed 18 Indian soldiers.
That followed India’s killing of militant separatist leader Burhan Wani in July.
As the start of US trading approached Thursday, crude oil trimmed its earlier 6% surge to $49
per barrel of Brent crude following news of the Opec deal.
“It’s nonsense,” commented former US Pentagon chief and now private-equity advisor David Petraeus overnight.
“Oil prices never should have gone up. The Saudis will continue to pump
. So will the Iraqis and the Libyans if they can.”
Inflation in Germany’s consumer price index
rose to 0.5% annualized in September, a 16-month high led by this month’s slowdown in energy price falls, new data said Thursday.
Ahead of next month’s key Diwali festival meantime, the Indian action “is negative for the economy
” of the world’s second-heaviest gold consumer nation, said FX trading chief Ashtosh Raina at HDFC Bank in Mumbai.
“Any strike, any tension across the border is definitely going to hurt sentiment.”
“While India is no China,” said a new economic outlook from US bank Citi researchers this week
, “[it] is becoming the third-largest oil consumer and importer of oil.
“As India’s base rises, so too should its global commodities’ impacts,” the report claims, saying that 8% annual GDP growth to 2021 will also support gold demand from the world’s second most populous nation.