Kaloti Precious Metals-Morning Market Report-Thursday, October 06, 2016

Market Daily & Weekly

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

Fundamentals and News

Wounded Gold Bull Market Steadies after Worst Slump in 3 Years

• Any decision by Federal Reserve to raise rates this year will need to be set against context of about 600 rate cuts by global central banks since about 2008, Evolution Mining Executive Chairman Jake Klein says Thursday in a Bloomberg Television interview. Klein says that “conditions for gold remain favorable, and producers should be happy with the metal’s gains this year even after losses this week”. He also added that “Gold as an asset class will remain attractive, as world remains in an environment of unprecedented low interest rates”.

• Gold posted mild gains in Asia on Thursday with a private U.S. nonfarm jobs report coming in weaker than expected, setting the satge for offical data from the U.S. Department of Labor at the end of the week seen as crucial to Fed rate hike chances in December.

• Overnight, gold prices turned lower during North America's session on Wednesday, reversing overnight gains after data showed that the U.S. services sector accelerated in September to the fastest level in 11 months.

• The Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 57.1 last month from 51.4 in August. Analysts had expected the index to increase to 53.0. That came after a separate report showed that U.S. non-farm private employment rose much less than expected in September. Payroll processing firm ADP said non-farm private employment rose by 154,000 last month, below forecasts for an increase of 166,000. The economy created 175,000 jobs in August, whose figure was downwardly revised from a previously reported increase of 177,000.

• After the biggest swoon in gold futures prices in almost three years, the market steadied during Wednesday trading session. Gold futures for December delivery slipped 0.1 percent to $1,268.60 an ounce at 1:46 p.m. on the Comex in New York, after slumping 3.3 percent on Tuesday. Prices are down 7.9 percent since a July peak as expectations for tighter monetary policy in Europe and the U.S. dent the appeal of the metal.

 “The gold bull has been given a good scare,” Adam Finn, who oversees precious metals at Triland Metals and was short gold, said by phone from London. “It’s not dead yet. We could drop down to $1,172 and still see a medium-term continuation of the move higher.”

 Data Forthcoming Releases

Courtesy: http://kalotipm.com.sg/kaloti-market-report-06102016