Gold firm on strong festive demand in India | Reuters

By Apeksha Nair Gold prices stayed firm on Wednesday as stronger physical demand for the precious metal, ahead of India's late-October festival season, offset a firm U.S. dollar.Demand for bullion is expected to pick up ahead of festivals such as Dhanteras and Diwali, which is also a time when gold is traditionally given as a gift.'A recovery in physical demand provided the foundation for the rally that carried over into later trading,' HSBC analyst James Steel said in a note

Reuters October 26, 2016 21:52:22 IST
Gold firm on strong festive demand in India
| Reuters

Gold firm on strong festive demand in India
 Reuters

By Apeksha Nair

Gold prices stayed firm on Wednesday as stronger physical demand for the precious metal, ahead of India's late-October festival season, offset a firm U.S. dollar.Demand for bullion is expected to pick up ahead of festivals such as Dhanteras and Diwali, which is also a time when gold is traditionally given as a gift."A recovery in physical demand provided the foundation for the rally that carried over into later trading," HSBC analyst James Steel said in a note. "Gold investors brushed aside the negative impact on bullion of a firmer USD."Spot gold was up about 0.1 percent at $1,275.04 an ounce by 0445 GMT. In the previous session, it hit $1276.67, its highest since Oct. 5.U.S. gold futures settled up 0.16 percent at $1,275.7 an ounce.

Flows into exchange-traded funds and pick up in Asian demand were keeping the metal stable, said Dominic Schnider of UBS Wealth Management in Hong Kong."Markets having already priced in the Fed's interest rate hike move," Schnider added."Yellen may hike rates now, but the trajectory is going to be very modest, and so interest rates in the U.S. in real terms will actually go down into more negative territory," he added. A Reuters poll showed the Federal Reserve is expected to raise interest rates in December.

Bank of England Governor Mark Carney cast doubt on expectations for more monetary stimulus in Europe while ECB President Mario Draghi said on Tuesday he would prefer not to have to keep rates so low for too long. Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.34 percent to 956.83 tonnes on Tuesday from 953.56 tonnes on Monday. [GOL/ETF]"The extreme longs on Comex have been reduced significantly providing upside support for the yellow metal and potential for another assault on $1,300," MKS PAMP Group trader Jason Cerisola said.

Spot gold may rise towards $1,292 per ounce, having cleared a resistance at $1,273, according to Reuters technical analyst Wang Tao."For the remaining of 2016, the suspense given the U.S. presidential election alone should be enough to support gold prices," OCBC analysts said in a note. Silver climbed 0.22 percent to $17.82 an ounce.Platinum slipped 0.23 percent to $961.00 an ounce, while palladium edged up 0.2 percent to $634.20. (Reporting by Apeksha Nair and Nallur Sethuraman in Bengaluru; Editing by Joseph Radford and Sherry Jacob-Phillips)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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