1. Gold price hovers below 3-1/2-month high after mixed US data

Gold price hovers below 3-1/2-month high after mixed US data

Gold held below a 3-1/2-month high on Monday, as mixed US economic data added to uncertainty over whether the Federal Reserve would raise interest rates this year.

By: | Singapore | Published: October 19, 2015 7:39 AM
Gold price

Gold held below a 3-1/2-month high on Monday, as mixed US economic data added to uncertainty over whether the Federal Reserve would raise interest rates this year.
(Express Photo)

Gold held below a 3-1/2-month high on Monday, as mixed US economic data added to uncertainty over whether the Federal Reserve would raise interest rates this year.

FUNDAMENTALS

Spot gold was steady at $1,176.11 an ounce by 0052 GMT, after dipping 0.5 percent on Friday on a stronger dollar.

The metal came under pressure on Friday after data showed US consumer sentiment rebounded strongly in early October, suggesting that the economic recovery remained on track despite headwinds from a strong dollar and weak global demand.

Inflation data on Thursday had also helped the dollar move away from seven-week lows as it rekindled expectations the Fed could raise rates for the first time in nearly a decade in December.

A separate report on Friday, however, showed industrial output slipped 0.2 percent on renewed weakness in oil and gas drilling.

Before the drop on Friday, gold had rallied to a 3-1/2-month high of $1,190.63 as investors bet the Fed could be forced to delay a rate hike to next year due to sluggishness in the US economy amid a slack in the global economy.

Investors sentiment towards gold has improved in recent weeks. Hedge funds and money managers raised their bullish bets in COMEX gold and silver to near five-month highs in the week ended Oct. 13, US government data showed on Friday.

Other data, however, showed a drop in assets of SPDR Gold Trust, the top gold-backed exchange-traded fund, by 0.89 percent to 693.75 tonnes on Friday.

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  1. M
    Martin S.
    Oct 19, 2015 at 10:36 pm
    "Other data, however, showed a drop in ets of SPDR Gold Trust, the top gold-backed exchange-traded fund, by 0.89 percent to 693.75 tonnes on Friday." How reliable are GLD's holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loop in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor to the fund. Some other red flags I've verified and welcome everyone else to do the same: "Did anyone try calling the GLD hotline at (866) 320 4053 in search of numerical details on GLD's insurance? The prospectus vaguely states "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." When I specifically asked for clarification on this clause and about how much of the gold was insured, the representative proceeded act as if he didn't know and said they were just the "marketing agent" for GLD. What kind of marketing agent doesn't know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors. I remember there was a well doented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities."
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