By Julio Cesar Medina, Senior Economist and Financial Analyst at Gold Rate
Despite expectations that the gold market will soon start showing consistently positive price dynamics, gold prices neared $1,192 per ounce today, recording a drop of 0.75% according to goldrate.com. Prices of gold oscillated towards a mark of $1,190 per ounce. The prices of spot silver followed the path of gold’s and fell by 0.32%. Spot silver is trading at around $14.27 per ounce today.
Prices of gold declined while showing a reverse correlation to the strengthening US dollar. The ICE US dollar index (DXY) improved by 0.37% to $95.96 today as the trade war between China and the USA continued with China announcing a rate cut of 1% on required reserves for local banks. The US will likely need to replace cheap Chinese imports, hence domestic producers will gain an impetus to fill that void.
Gold coins lost 17 points and cost between $1,217 and $1,224 per ounce. Prices of silver coins recorded little variation – only around 0.3 points. US gold futures traded at $1,192.30 an ounce, down by 1.1%.
Stocks of SPDR Gold Trust, the largest gold-backed exchange traded fund (ETF), fell by 1.5%. Its physical holdings narrowed to 730.17 tons which is worth $27.85bn in total.
In India, one of the major consumers of gold, the prices of precious metal were largely unresponsive to the price fluctuations in US markets. Gold prices fell by only 30Rs over Friday’s figure. Domestic demand by jewelers for gold and silver, which drives prices in India, has ignored the volatilities surrounding the USA-China trade war.
Among gold suppliers, Acacia Mining, owned by Canadian Barrick Gold, has announced about its plans to increase gold production from 435,000 ounces to over 500,000 ounces for this year. The company’s three mining sites in Tanzania have given larger outputs than the company had foreseen. Acacia Mining has sold out almost all the gold that it has produced this year.