Gold business continued to show strength during Wednesday morning sessions, building on the previous day’s gains, to hit a fresh two-week high.
The spot gold price was the highest since May 28, having peaked at $1,264.90 per ounce. It was last at $1,262.50/1,263.30 a $3.3 increase on the previous day’s close.
“We feel the gold price is edging higher and the potential for short-covering could drive prices higher for a while longer,” said FastMarkets analyst William Adams.
The yellow metal perked up during yesterday’s sessions, shrugging off a stronger euro, as its status as a “safe haven” boosted prices following negative reports from Iraq. The country’s Minister Nuri al-Maliki asked parliament to declare a state of emergency after the Northern city of Mosul was seized by insurgents.
“There were also traders who are of the opinion that the turnaround of the dollar/yuan fix to fix lower has been the catalyst of this move and, whether it is a coincidence or not, it was at the same time as the euro started to spiral lower – possible repatriation from eurozone to China,” said MKS Capital.
Meanwhile, it has been reported that China imported close to 15 tonnes of gold, via Shanghai’s free-trade zone in the first quarter.
“In other words, the zone is clearly becoming increasingly popular as compared with Hong Kong, the main trading centre for gold. Because China does not publish any gold import figures itself, this development is likely to give rise to less transparency in future as regards Chinese gold imports,” said Commerzbank.
The silver price at $19.21/19.27 was up against the previous day’s close of $19.18.
The platinum price at $1,475/1,480 was $2 higher and trading at the highest since mid-May. The palladium price stormed to $856 per ounce – its strongest level since February 21, 2011, which itself was a 10-year high.
The PGMS have found support from the long-running strike in South Africa, which has failed to reach an agreement. Additionally, positive Chinese sales in May have helped provide support.
According to the China Association of Automobile Manufacturers (CAAM), they climbed by 13.8 percent year-on-year to 1.59 million units.
SOURCE: The Bullion Desk by Kathleen Retourne