Gold and silver start the last trading session of the week under some technical pressure and the bull camp that has to be discouraged with the lack of upside sensitivity off the impeachment situation. However the gold market is faced with yet another higher high for the move in the dollar this morning which has put the currency index at a new 2019 high.
Apparently the gold market is also uninterested in news that Chinese gold imports from Switzerland and Singapore in August jumped significantly and that failure to react is even more surprising considering news earlier in the week that Chinese imports from Hong Kong in August jumped by more than 60% on a month over month basis.
Another underpin for gold and silver that is being discounted this morning is the fact that ETF's continue to see inflows with gold ETF's posting the ninth straight day of inflows. So far this year gold ETF's have added almost 10 million ounces and have reached the highest holdings level in 12 months. The market overnight saw another prediction of record gold ETF holdings, this time with the prediction targeting a new record within the next six weeks.
Silver ETF's also added to their holdings bringing this year's net purchases to 98.6 million ounces.
While stories overnight suggested the potential for improved Indian Festival buying ahead a combination of high gold prices and a weak Indian currency has discourage some Indian buyers in recent months and therefore it could take a further correction in gold prices to foster noted seasonal buying from an important demand source. However the Diwali festival is the primary Indian demand window and some analysts have suggested slack imports last month suggests there is pent-up demand from India waiting in the wings.
Unfortunately gold looks set to post a negative weekly trade as the market is showing a lack of sensitivity to the threat against the US President and gold looks to remain under modest pressured as a result of the latest "hope" for progress on a trade deal.
In the end, ongoing inflows to ETF instruments, signs of strong Chinese gold demand and the prospect for improved Indian seasonal buying ahead should make a return below $1,500 a buying opportunity.
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