China gold reserves rise

Daniel Fowler
October 9, 2019

Spot gold was down 0.3 per cent at $1,499.79 per ounce at 1129 GMT. Prices had dropped as much as 1% in the previous session.

For the week ahead, besides trade talks, we have a number of other key events for the USA, including Fed governor Powell, speaking, the FOMC minutes and U.S. consumer Price Index.

Russian Federation and China have been consistently stockpiling gold bullion in recent years to shift their growing worldwide reserves away from the USA dollar.

The odds of a US rate cut when the Federal Open Markets Committee meets on October 29-30 appeared to increase earlier after producer prices fell by the most in eight months, leaving the annual rate of factory gate inflation at 1.4%, its lowest since 2016. "The fact that the dollar is a tad higher is the reason gold is a bit softer", said Saxo Bank commodity strategist Ole Hansen.

"There's a possibility the U.S". "All that's interpreting into a range-bound action for gold here".

To the upside a strong break back above $1,495/oz. should see momentum building towards $1,520/oz. with moving average resistance seen at $1,502/oz. and $1,510/oz.

Angela Merkel warns UK Brexit deal 'unlikely' without compromise
Merkel's concerns "represent a new established position, then it means a deal is essentially impossible, not just now but ever ". Neil Wilson of the financial trading company said: "We are now heading towards the revoke versus no deal showdown".

On the European front, the prospects of an orderly Brexit seemed dim as a British source said that German Chancellor Angela Merkel told Prime Minister Boris Johnson by phone that a deal was "overwhelmingly unlikely". While high-level negotiations are set to resume in Washington this week, Chinese officials are signaling they're increasingly reluctant to agree to a broad deal.

Among other precious metals, silver gained 1.2% to $17.64 an ounce, after touching its highest since September 27 at $17.80.

Last month, the price of gold skyrocketed to its highest level in six years, highlighting the uncertainty investors have been feeling about the global economy. By contrast, European investors, who had bought earlier against a backdrop of Brexit concerns and the European Central Bank's negative interest rates, added only 7.7 tons.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched up 0.13% and the US dollar .DXY against a basket of currencies firmed around 98.98.

Elsewhere, platinum was down 0.1% to $877.18, silver dipped 0.6% to $17.45 and palladium fell 0.3% to $1,660.29.

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