GOLD TRADING in London on Friday afternoon saw wholesale prices jump 2.1% from an early low, briefly popping above $1100 per ounce as the US Dollar fell hard following weaker-than-expected consumer sentiment data for June.
US employment costs also missed analyst forecasts, with compensation and wages slowing to a 0.2% rise in Q2 from 0.7% in Q1.
The Euro jumped 1.5 cents against the Dollar to reach a sudden 2-day high above $1.11 in FX trading.
Gold then cleared Friday afternoon’s benchmark auction in London at $1098.40 per ounce, avoiding a fifth weekly drop in succession – a run last seen in late 2014 and the summers of 2004-08.
July’s run of 4 weekly losses was 2 weeks short of summer 2000’s drop, and well short of summer 1996’s 10-week run.
Friday’s pop still left gold trading some 6.2% lower from the end of June, its heaviest 1-month drop since the gold crash of spring 2013.
But volume in contracts for the kilobars preferred by Chinese investors fell sharply to less than half recent averages as its price rose to a premium above London quotes of nearly $3.75 per ounce, near the highest levels this month.
Hong Kong’s wholesale dealing “[saw] demand only on Monday,” Reuters quotes Ronald Leung at Lee Cheong Gold Dealers, reporting a small premium to London quotes of around $1 per ounce in the Asian gold trading hub.
Daily volumes dealt between the clearing members of the London Bullion Market Association averaged below $20 billion in June, down from a peak above $45bn in August 2011.
“We are bearish,” says a technical analysis from Canada-based bullion bank Scotia Mocatta, “looking for another leg lower to target 1044 – the 2010 low.”
Thursday’s data from the SPDR Gold Trust (NYSEArca:GLD) showed the exchange-traded gold fund holding 680 tonnes of bullion to back its shares – a 7-year low unchanged from the end of last week.