Gold futures started the week on a steady note; however, both financial investors and physical buyers continue to exhibit an eerie indifference, which leaves the complex vulnerable to downside risk.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was last down 20 cents in price at $1,267.10 an ounce. Trade has ranged from $1,265.40 to $1,272.60.
“Gold continues to benefit from the uncertainty and geopolitical tensions; however, it needs to be mentioned that the safe-haven demand remains restrained. Despite of lower price levels the interest in physical metal has also been rather weak,” Heraeus said in a note.
Meanwhile, the the sharp fall in the gold price at the beginning of last week was likely due to financial speculation, as the latest data from the Commodity Futures Trading Commission (CFTC) reported that investors their net long Comex positions by 22 percent to 62,900 contracts in the week ending September 2, which is the lowest level for eleven weeks.
“This was attributable first and foremost to an increase in short positions (short sales). During the reporting week, net long positions in silver were actually cut almost in half to 7,500 contracts – likewise as a result of a sharp increase in short positions,” Commerzbank noted.
“We are only likely to see significant rises in the prices of gold and silver again once the currently high level of pessimism among financial investors abates,” the broker added.
In data, China’s trade balance of $49.8 billion was higher than expected and, in Europe, Germany’s trade balance also came in above expectations at 22.2 billion euros.
Meanwhile here in the US, Friday’s worse-than-expected non-farm jobs payrolls for August failed to a lasting impact on the market despite coming in 84,000 below forecast at 142,000, although the national unemployment rate ticked 0.1 percentage points lower to 6.1 percent.
“This was a disappointing report and raises expectations that the Federal Reserve will be on hold regarding monetary policy for quite some long while into the future,” Dennis Gartman, editor of the Gartman Letter, said.
In the wider-markets, the euro was slightly weaker at 1.2947 against the dollar, while Germany’s DAX and France’s CAC-40 were down 0.09 percent and 0.29 percent receptively. In Asia, the Nikkei ended 0.23 percent higher and the Hang Seng 0.2 percent lower.
As for the other precious metals, Comex silver for December delivery was up 4.9 cents at $19.205 an ounce. Trade has ranged from $19.180 to $19.345.
Platinum futures for October delivery on the Nymex was down $4.80 at $1,406.20 an ounce, while the most-actively traded palladium contract was at $886.40 an ounce, down $5.05.