Among other precious metals, platinum slid for a fifth session out of six on fears that demand from the auto sector, where the metal is used in diesel catalysts, could take a hit following the Volkswagen emissions scandal.
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Gold futures for December delivery gave up $8, or 0.7%, to settle at $1,124.80 an ounce on Comex.
DailyFX notes that the strong rally on Thursday had set a “higher low” for the precious metal and on one view could see it push on to challenge its summer high of $1,170, but that in general “the “big picture” down trend in gold is still very much intact”. With the Fed still expected to hike rates before the end of the year, gold could come under pressure again.
After suffering a $5.00, or 0.44%, loss the previous day, gold inched back up on Tuesday morning$1.40, or 0.12%.
Volkswagen AG, the world’s biggest carmaker by sales, admitted to US regulators that it programmed its cars to detect when they were being tested and alter the running of their diesel engines to hide their true emissions. The biggest thing that the Federal Reserve said last week was simply that the decision to raise the rates was simply postponed, and that it was not a definite decision for the rest of the year. “Gold would benefit from any delay in raising U.S. interest rates”, the paper explains, as the non-yielding commodity “would struggle to draw investors away from Treasury bonds when rates climb”.
The uncertainty in various asset classes as investors move to the sidelines ahead of the Fed’s policy meets in October and December could help support gold prices to an extent, he said. Even today, gold is still the best safe haven for people, and there are still a lot of people who would rather have gold on hand, since uncertainty is still a huge concern in the marketplace.
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Spot palladium logged a near 7 percent jump in the previous session. News of inflows into gold-backed funds and purchases by central banks provided some support for gold. So look for gold to continue going up and down for the next few weeks as investors still wonder when the interest rates will go up and how that affects other commodities.
