Gold stays under $1,200/oz but supported by dip-buying

The spot gold price inched higher during Asian trading hours on Wednesday November 30 on support from dip-buying but remains under $1,200 per oz.

The spot gold price was recently quoted at $1,192.50/1,192.80 per oz, up $4.40 on the previous close. Trade has ranged from $1,187.95 to $1,195.00 so far.

“Dip-buying from the physical sector continues to provide underlying support but we maintain our view that gold will remain under modest pressure in the short-term, at least until the December FOMC meeting,” Metal Bulletin Research analyst, James Moore, said.

The US Federal Open Market Committee (FOMC) will announce its Federal Funds rate on December 14 – 98.6% of market participants expect the FOMC to announce a rate hike on the day, according to the CME FedWatch Tool.

Gold has been regaining ground over recent days with price rallying back towards the $1,200 per oz-mark, Joshua Mahony, a market analyst at IG, said.

“However, as long as price remains below $1,200, a bearish outlook is in play,” he noted.

In other commodities, the Brent crude oil spot price rose 0.67% to $47.55 per barrel recently on Wednesday. Investors are watching the outcome of an OPEC meeting later in the day where members will discuss production cuts to curb oversupply in the market.

A failure to reach an agreement will likely see oil prices test the strong support of $43-44 per barrel, though if an agreement is reached, oil prices will likely test the year’s high of $53 per barrel very quickly, ANZ Research said on Wednesday morning.

In US data released Tuesday, preliminary third quarter US GDP rose 3.2% quarter-over-quarter, above the 3% forecast and one of highest expansionary periods since the Great Recession. CB consumer confidence shows Americans are growing more optimistic with the November reading coming in at 107.1, a major upset of a 101.3 expectation.

The preliminary GDP price index during the third quarter, however, came in at a slightly disappointing 1.4% – 1.5% was expected after reaching the same mark in the previous quarter.

US data due later today includes the ADP non-farm employment change, core PCE price index, personal spending, personal income, Chicago PMI, pending home sales and crude oil inventory.

In currencies, the US dollar index rose 0.04% to 101.03 recently on Wednesday.

In equities, the Shanghai Composite slipped 0.86% to 3,254.62 so far today.

In the other precious metals, the spot silver price increased $0.04 to $16.65/16.69 per oz. Platinum at $920/925 per oz was up $5.50, while palladium rose $4 to $761/766 per oz.

On the Shanghai Futures Exchange, gold for June delivery was recently at 272.05 yuan ($40) per gram, and the June silver was at 4,177 yuan per kilogram.

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