Gold price in the global open market dipped by a small percent to retreat from the 5-week high that was achieved during trading yesterday. The prices of gold shot up at the start of this week, only to come down on Tuesday, as the rates for the dollar crawled up higher.
Spot gold decreased by over 0.3 percent to reach the rate of $1,234.71 per ounce. The prices for spot gold hit their highest level in a 5 week period on 3rd December, surpassing the $1,241.86 price that was achieved on October 26. Gold futures also decreased by some 0.5 percent during the day, as they finished at $1,240.2 per ounce.
“Gold is mainly tracking the U.S. dollar,” believed Brian Lan, who is the managing director at GoldSilver Central in Singapore. “Today’s move in gold prices is a correction because yesterday prices were up quite a bit.”
The United States dollar index, which is a source of measuring the United States dollar against six other major currencies, increased by 0.1 percent.
Earlier on Tuesday, the United States President Donald Trump hinted that they could extend the days for the 90-days ceasefire with China. Although, he did warn that any non-compliance on part of the Chinese would not resolve the differences.
“Normally you would expect a better outing from gold given the absolute beatdown in stocks, but this is a baby step for the precious metal,” mentioned Amit Kumar Gupta, who is a portfolio management services head for Adroit Financial Services in New Delhi.
“Gold at this point will correct a little more. $1,242.5 is the level gold has to test before it goes up to the next level. The downside we are looking at is $1,230” GoldSilver Central’s Lan mentioned.
Palladium Hits a Record High
In latest news from the market, Palladium hit a record high of $1,239.50 per oz during trading on Tuesday. The record saw Palladium briefly surpass the rates of gold, which just scaled over their 5-week peak. The prices for Palladium are believed to have had increased because of speculative interest in the autocatalyst metal from investors.
Palladium climbed upwards to reach $1,235 per ounce, with an increase of 2.6 percent during the day. Spot gold prices are currently being traded at $1,237.44 in the market.
“We have a tight fundamental market, flat supplies, rising demand and on top of that, undoubtedly some speculative interest which has helped drive prices to all-time record highs,” stated Jonathan Butler, an analyst at Mitsubishi.
“For the moment, we don’t see anything changing; the metal remains in demand for industrial uses, speculators are covering their positions, lease market is very tight, and palladium forwards are in backwardation. We could see some higher prices from here in the very short term.”
“Palladium continues to fire long signals on all indicators and to make new highs, and is now challenging gold as reduced auto tariffs from China boost demand expectations in an already tight market,” analysts at TD Securities noted down.