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Gold nudges higher as China keeps buying

The metal was around US$5 higher at US$1,076 as stocks on Wall Street opened lower.

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Gold was volatile throughout the day on Tuesday

Gold was volatile throughout the day on Tuesday, starting lower before rebounding as trading got underway in the US.

The metal was around US$5 higher at US$1,076 as stocks on Wall Street opened lower.

The Chinese central bank (PBoC) bought around 670,000 ounces or 21 tonnes of gold in November to diversify its currency reserves, according to its website.

It is the highest monthly gold purchases so far by the central bank, which since July has provided monthly data of its gold reserves.

Precious metal analyst Commerzbank said: “Evidently the PBoC took advantage of the significant price fall in November – when gold shed nearly 7% – to buy more gold than in the preceding months.”

It will probably continue to purchase gold in the coming months, the analyst added, because gold still only accounts for a small proportion of its currency reserves, around 1.6%.

Gold started the week down, slipping back yesterday by around US$10, having risen by more than US$20 on Friday.

Commerzbank said: “Up one minute, down the next – this is one way to describe the situation on the precious metal markets.”

Commerzbank said last week’s gains are “clearly being viewed as excessive”.

Among other things holding the metal from breaking above US$1,100, outflows from the gold exchange traded funds climbed to some four tonnes yesterday.

Conversely, silver saw a 76 tonne inflow into its ETFs, the highest daily inflow since June, preventing a further price fall.

Silver was trading relatively flat at US$14.23.

Elsewhere, platinum gained US$5 to US$861.

 

Major Movers

Randgold Resources down 136p to 4,081p

Fresnillo down 19p to 671p

Anglo American down 41p to 327p

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