LONDON(Commodity Online): Gold prices remain well supported despite the seasonal weakness in physical demand, says Barclays in an update.
On the supply side, China's Ministry of Industry and Information Technology reported its gold output rose by 4.24% y/y for the year to April and was up 5.05% y/y at 29.819 tonnes in April alone.
“Even though supply from China remains healthy, it is outpaced by its demand growth, in turn keeping China a net importer of gold, a dynamic unlikely to shift in the near term, in our view.”--Barclays said.
Prices eased across the complex yesterday led by the weakness in palladium. Palladium prices lost 2.5% to close at $752.4/oz, its weakest close this month as concerns over weakness in demand continue to weigh upon prices. Platinum prices fell by 1% to settle at $1752/oz, its lowest close since 23rd May.
The PGMs have been caught between supply side constraints and physical demand, from China in particular, providing support on the downside but a demand slowdown capping the upside. Short term investor interest has turned positive in recent sessions with speculative interest in Nymex palladium rising to a three month high.
Platinum ETP interest has been unchanged over the past week; however, palladium suffered from net redemptions yesterday falling by 9.7koz. Gold prices closed less than $2 lower on the day as the dollar strengthened against the euro to levels not seen in three weeks, equity markets retained their recent weakness, concerns over Greece heightened and US macro data was mixed.
