Friday’s Commentary On Spot Gold
$GLD
Spot Gold was little changed near 7 week lows Thursday.
Traders, and invesors shifted their focus to Friday’s US NFPs report for indications on the strength of the US economy and the chance of a near term Fed rate hike.
The consensus forecast is that the data will show jobs growth of 180,000 in October, following an increase of 142,000 in September, while the unemployment rate is forecast to hold steady at 5.1%.
A strong NFPs report will likely add to already growing expectations for a December rate hike, a weak number could undermine the argument for an early rate increase. We wait to see.
Meanwhile, Neutral to Bearish Gold in here.
India, the world’s 2nd-biggest Gold buyer after China, imposed the import restrictions last year to avert a trade deficit crisis that pushed the Rupee to record lows.
“Restrictions placed on import of Gold… stand withdrawn with immediate effect,” India’s central bank said in a statement on Saturday, 29 November.
Support for Spot Gold comes from jewelry demand from India in the lead up to and during the wedding season, which starts again in late September. India did record a 176% increase in Gold imports in August to US$2-B from about US$756-M.
Overall, the impact of wedding season Spot Gold buying has faded in recent times as India is no longer the world’s largest Gold consumer, partly because of the on-going government import restrictions on precious metals. If they are further relaxed, perhaps India will regain its Top spot.
India’s Akshaya Tritiya festival considered by India’s more than 900-M Hindus as an auspicious day to buyGold and Silver, fell on 21 April this year. Bullion is bought in India during festivals and marriages as part of the bridal trousseau or gifted in the form of jewelry by relatives.
Stay tuned…
HeffX-LTN
Paul Ebeling
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