Gold Trades Near 1-Week Low as Investors Weigh Stocks to Buying

08:23 PM @ Monday - 27 October, 2014
Gold traded near the lowest in more than a week in New York as investors weighed reduced demand for a haven against signs of more physical purchases.

Gold fell to a one-week low of $1,226.30 an ounce on Oct. 23 and declined 0.6 percent last week as global equities and the dollar strengthened. In top buyer China, volumes for the benchmark spot contract on the Shanghai Gold Exchange were near a two-week high, the latest data show.

Equities reached the highest in two weeks today as none of Europe’s largest banks failed European Central Bank-led stress tests. The Federal Reserve is expected to end monthly asset purchases at its Oct. 28-29 meeting. Traders have pushed back estimates for when the Fed will raise U.S. interest rates as policy makers expressed concern that the economy may be at risk from a global slowdown.

“We believe the floor for gold has firmed in the short term, as physical buying has gained momentum,” Barclays Plc wrote in a report today. “We continue to view rallies as opportunities to sell. Some of the gloom regarding the global growth outlook is improving. Fed watchers should keep a keen eye on any future changes to forward rate guidance.”

Gold for December delivery lost 0.1 percent to $1,230.10 an ounce by 7:27 a.m. on the Comex in New York. Bullion for immediate delivery was little changed at $1,230.01 in London, according to Bloomberg generic pricing.
Bullish Position

Futures trading volume was 29 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg show.

Money managers’ net bullish position in gold rose 45 percent in the week ended Oct. 21, the biggest gain since June, U.S. Commodity Futures Trading Commission data show. Holdings in bullion-backed exchange-traded products contracted to a five-year low last week, data compiled by Bloomberg show.

Silver for delivery in December added 0.1 percent to $17.20 an ounce in New York. Palladium for delivery the same month rose 0.1 percent to $782 an ounce. Platinum for January delivery gained 0.4 percent to $1,256.50 an ounce. Platinum ETP holdings fell to 83.5 metric tons on Oct. 24, the lowest since May, data compiled by Bloomberg show.
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