At the begging of February there are few factors to watch which affect precious metals. China reached record levels of physical gold import from Hong Kong. US gold is under pressure due to growth of US service-sector index. Fund purchasing is seen as platinum, palladium shift losses. Later on Wednesday two more important economic date reports will be posted in the United States, in addition to the US refinancing and mortgage index report.
Yesterday gold declined. The US and global economy outlook has improved with strong gains in equities. Naturally, investors see better opportunities in stocks.
The business optimism in the Euro Zone reached an eight-month high. According to data reports, the US services sector expanded in January. These factors brought better demand expectations for platinum and palladium.
Gold bullion rose earlier in January. Gold flow report for 2012 showed 47% increase in Chinese imports from Hong Kong. The yellow metal inflow reached record levels.
The same report contained latest official-sector data for fresh interest in gold. The metal was more appealing for central banks of Russia, South Korea and other emerging economies.
By 19:42 GMT, spot gold slid down 0.1 percent to $1,671.80 per ounce. The metal fell back from a high of about $1,685 per ounce, seen earlier in the session.
The US future gold contacts for delivery in April lost $2.90 reaching $1,673.50 per ounce. Analysis shows a 30-day average drop of 10% in trading volume.
Gold was also pressured by signs of economic recovery in the Euro Zone. In January market data pointed out growth to a 10-month high. In addition the US service sector presented positive statistics. The combined economic stability shifted investors’ interest from gold to equity markets.
Now gold investors are thinking over the US fiscal budget deficit report for 2013. The data says that the budget deficit will fall to $845 billion. Investors got used to $1 trillion-plus deficits seen over the past four years. Now things are different.
The price of spot silver climbed up by 0.2 % to trade at $31.78 per ounce.
Currently platinum and palladium are outperforming gold. On Tuesday these metals both rose for a third day in a row. During February experts expect more gains supported by further macroeconomic improvement. This could drive fund buying in the shiny metals.
There are few reasons why platinum and palladium outperform gold and silver so far in 2013. The global economic outlook is improving. South Africa is the largest platinum and palladium supplier in the world. Since the beginning of the year the country faced more of the persistent supply disruptions. Therefore both metals have strong support.
Platinum climbed up by 0.4% trading at $1,700.24 per ounce. Palladium shifted the early losses by rising 1% reaching $762.47 per ounce. This came after a fresh 17-month high of $766.22 per ounce.
Yesterday the Swiss customs bureau came up with a report. Net exports of platinum in Switzerland multiplied 3 times in 2012. At the same time palladium exports rose more than 50% in the same period. The country is currently one of the main refining and trading hubs for platinum commodities.
Though, experts are still expressing concerns about the unstable demand for platinum group metals. The improvements in China and US are not enough to compensate for the ongoing weakness on the European market.
