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Gold lifts as tensions in Turkey rise, platinum set for 2016 surplus

Tensions in Turkey and a weaker dollar sparked some demand for the precious metal.

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Gold was trading US$10, or around 1%, higher to US$1,077 on Tuesday

Gold was higher today despite strong US data increasing the likelihood of a Federal Reserve interest rate rise in December.

US third quarter GDP was revised higher from 1.5% to 2.1%, showing an improving US economy.

Russ Mould, at AJ Bell, said the revision “looks to give further ammunition to hawks on the Federal Open Markets Committee and supports their case for a first interest rate rise in America since 2006.”

But, “even so, it is not an open-and-shut case,” he added.

The lift-off might boost the gold price if, as expected, the increments are at a slow pace.

Analysts expect that, at the very least, it would take away the uncertainty that has been surrounding the decision for some time.

Gold was trading US$10, or around 1%, higher to US$1,077 on Tuesday as tensions in Turkey and a weaker dollar sparked some demand for the precious metal.

The shooting-down of a Russian jet by Turkey unsettled traders causing stock markets to fall across Europe and the US.

Elsewhere, the World Platinum Investment Council forecast that the platinum market deficit will shrink this year before entering a surplus of 5,000 ounces in 2016.

In its third quarter report, the Council said the market to a swung deficit of 320,000 ounces from a surplus of 240,000 ounces over the same period the year before.

But looking ahead, the market looks destined to return to a surplus next year, the report said.

Mine supply, which was boosted by the return to normalised output from South Africa after last year’s miners' strikes, could rise another 2% next year thanks to gains in Zimbabwe, it said.

But demand looks set to drop in 2016, with investment demand scheduled to fall 19% to 130,000 ounces from 160,000.

Despite the Volkswagen scandal, the report suggests demands from car-makers will be higher as will jewellery demand, but not enough to stop a surplus.

This could put more pressure on the platinum price, which has already lost some 30% this year, but was up US$1 on Tuesday to US$846.

Elsewhere, silver was around 1% higher to US$14.29.

 

Major Movers

Randgold Resources up 125p to 4,081p

Fresnillo up 17p to 718p

Anglo American up 14p to 455p

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