PRECIOUS METALS fell back Thursday morning in London, with gold reversing $20 of yesterday’s near-$50 rally to trade 2.6% lower for the week so far.
The price of silver dropped almost 50c from Wednesday’s peak, but held only 1.1% beneath last week’s finish at $21.57.
World stock markets meantime ticked lower, as did major government bonds and commodity prices.
At this morning’s London Fix – the global benchmark for valuation and shipping contracts – daily volatility in the gold price stood near last week’s 2-month highs at 25.7%.
Silver price volatility – a measure of the violence in its daily swings – last week hit its highest level since May at 43.9%, retreating to 39.2% by Thursday’s Fix in the London bullion market.
Tuesday’s sudden $40 drop in gold – made inside 1 hour – happened right at the start of US trade. Wednesday’s sharp bounce in the Dollar price, which came after weak US jobs data, “[still failed] to regain the previous high,” says Victor Thianpiriya at ANZ Bank in Australia.
Wholesale prices for gold bullion peaked yesterday at $1324 per ounce, beneath the $1331 level where Tuesday’s drop began.
Gold coin sales by the US Mint meantime recorded a 6-year low over the last two months, notes Barrons magazine.
From Monday this week, adds specialist site Mineweb, the State of Texas is levying no sales tax on gold, silver or platinum coins – a first for US citizens, and eliminating a 6.25% on bullion coin and numismatic purchases made locally below $1,000 in value.
Gold trading in China is also set for further deregulation, the People’s Bank said earlier this week, as it opens up new licenses for importing and exporting.
Looking at Chinese premiums, over and above the world’s London benchmark gold price, they “did not rise as might have been expected” in September, notes Australia’s Macquarie bank, “suggesting a non-price related weakening of Chinese demand.
Prices for Indian gold consumers – hit by strict anti-import rules this year, aimed at reducing the country’s large trade deficit – eased on Thursday as the Rupee recovered 1% on the currency market.