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Gold holds firm as oil, equities wobble again

Spot gold was flat at around US$1,230 a couple of hours into US trading
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Gold was also being helped by another substantial inflow into gold exchange traded funds (ETFs)

Gold was heading higher as oil and stock markets ended the week on a downbeat note.

Spot gold was flat at around US$1,230 a couple of hours into US trading, but that marked a bounce back from heavy losses on Monday.

Brokers are starting to take a more optimistic view of prospects for the metal, if not this year than certainly in 2017.

French bank Credit Agricole sees gold trending higher into 2017 and expects the price will rise to $1,250 an ounce in December and $1,320 a year later.

Even if some of the market turbulence seen so far this year does ease, it does not necessarily mean the gold price will fall said the bank.

“This is because central banks such as the BOJ and ECB will be slow in reacting to improving conditions. Hence, currency debasement fears will remain an important factor in keeping precious metals in demand.”

The French house also sees the upward appreciation of the US dollar, something that has weighed heavy on the gold price, as coming to an end.”

“This is due to limited room for central-bank monetary-policy expectations to diverge further. As a result of the conditions outlined above, we see scope for gold to trend higher towards the end of the next year.”

Gold was also being helped by another substantial inflow into gold exchange traded funds (ETFs).

Some 5.3 tons moved into gold-backed ETFs taking the total this year so far to 154 tons, or more than flowed out in 2015.

Silver was also flat at US$15.34, while platinum eased US$2 to US$939.

Major share moves

Randgold Resources up 170p to 6,370p

Fresnillo up 26p at 947p

Anglo American down 3p at 428.7p

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