The African Standard bank released its daily commodities analysis and report for October 3rd. The report analyzed gold price movement.
With China on holiday, gold physical demand from Asia is lower. The bank analyst expects gold price to drift below $1,300 on the lack of strong physical demand. Although the Gold Physical Flow Index (GPFI) indicates an improvement in the physical demand, the bank analysts still believe that gold is more vulnerable than a week ago due to the absence of China. Next week might bring the price of gold lower.
On the other side of the ocean, the US employment data due to be released on Friday might not be released due to the U.S. government funding gap. Market consensus leans towards the possibility of no employment data would be released this week. However, whether it is released or not, it won’t change the long term outlook for gold. On the short term outlook, the absence of a catalyst to drive the prices higher make the possibility of gold price to weaken is more likely.
The next date the market is waiting for is October 17. The U.S. government should start shutting down some services in an orderly fashion. The U.S. Treasury already said they are able to fund spending till October 17, after that they will more likely to hit the debt ceiling and wouldn’t be able to borrow further. Gold failed to see gains from this uncertainty despite the U.S. dollar weakening. That’s certainly not a bullish signal for gold.
COMEX gold future settlement was at $1,312.80, DGCX gold future was at $1,311.20, CBOT gold at $1,320.40 and TOCOM gold was at ¥4,122 per gram.