Kaloti Precious Metals-Morning Market Report-Friday, October 21, 2016

Market Daily & Weekly

Note: Indications only, open and closing prices are bids; Data source: Bloomberg; Times as per Dubai

Fundamentals and News

Gold Futures Mark First Decline in 4 Sessions

Gold futures settled lower Thursday after posting gains over the past three sessions, with prices under pressure as the U.S. dollar strengthened against the British pound in the wake of the European Central Bank’s decision to leave its monetary policy unchanged.

Prices for the yellow metal had climbed in early dealings, following a round of fresh U.S. economic data and another contentious U.S. presidential election debate.

December gold GCZ6 fell $2.40, or 0.2%, to settle at $1,267.50 an ounce. Prices settled at $1,269.90 on Wednesday, a more than two-week high. December silver SIZ6 lost 11.4 cents, or 0.7%, to $17.549 an ounce.

The ECB on Thursday left interest rates unchanged, as expected.

Traders took comments from the central bank’s President Mario Draghi his “as dovish, particularly those suggesting the ECB would not end its QE program abruptly in March, supporting speculation the program could be extended and/or wound down over time though tapering,” said Colin Cieszynski, chief market strategist at CMC Markets. “More information is likely in December.”

In reaction to the ECB’s latest update, the ICE U.S. Dollar Index DXYa measure of the U.S. currency against six rivals, was up about 0.3% as the British pound GBPUSDfell by 0.2% versus the greenback. The dollar and gold often move inversely because a firmer buck leaves dollar-priced commodities less desirable to purchasers using another currency.

Still, gold futures were up roughly 1% week to date with the dollar index trading below the multimonth highs hit earlier this month. Spotty U.S. economic data has caused some investors to rethink the likelihood of a late-year Federal Reserve interest-rate hike.

“Gold received a welcome boost this week with the metal charging towards $1,270 as the combination of dollar weakness and slightly diminishing expectations over the Fed raising U.S. rates in December attracted bullish investors,” said Lukman Otunuga, an FXTM research analyst

Data Forthcoming Releases

Courtesy: http://kalotipm.com.sg/kaloti-market-report-21st-october-2016