Precious Metals Market Review by Bill Musgrave – American Gold Exchange
Gold Market News for November 3, 2014.
Gold slid 0.4% to close under $1,167, near a four-year low, as weak factory data almost everywhere but in the U.S. boosted the dollar, reducing demand for the metal as an alternative asset.
Manufacturing in China fell to a five-month low last month despite government efforts to stimulate growth, suggesting that more stimulus will be needed in the world’s second-largest economy. South Korea and Indonesia also experienced factory slowdowns, and the Eurozone PMI showed that manufacturing expanded at a slower rate last month than first reported.
Meanwhile, U.S. manufacturing rose at a faster pace than expected, hitting the highest ISM reading since March 2011, led by auto sales and corporate investment in equipment.
The slowdowns outside of the U.S. are leading forex traders to expect additional monetary stimulus in most major economies, all the more so after Japan’s surprise announcement last week of deeper quantitative easing. Conversely, rising growth in the U.S. points to the possibility of interest rates rising more quickly than previously expected following the Fed’s termination of QE this month.
The dollar rallied against most major rivals on the divergent recovery and policy outlooks, hitting a seven year high against the yen. A stronger dollar weighs on gold and other commodities by making them more expensive to holders of other currencies. Crude oil fell nearly 3% to more than a four-year low.
The other precious metals were mixed. Silver tumbled 1.5% and platinum lost 0.6% while palladium added 0.6%.
At the Comex close: December gold slid $4.80 to $1,166.80 an ounce. December tumbled 24 cents to $15.87; January platinum dropped $7.60 to $1,227.60; and December palladium added $4.45, to $796.25 an ounce.