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PRECIOUS-Gold near 1-wk lows as trade, emerging market concerns boost dollar

Published 2018-09-04, 09:09 p/m
Updated 2018-09-04, 09:10 p/m
© Reuters.  PRECIOUS-Gold near 1-wk lows as trade, emerging market concerns boost dollar

© Reuters. PRECIOUS-Gold near 1-wk lows as trade, emerging market concerns boost dollar

BENGALURU, Sept 5 (Reuters) - Gold on Wednesday held near one-week lows touched in the previous session, as global trade tensions and emerging market concerns boosted demand for the U.S dollar, undermining the metal's safe haven status.

FUNDAMENTALS

* Spot gold XAU= was little changed at $1,191.45 percent at 0102 GMT, after touching a more than one-week low at $1,189.20 on Tuesday.

* U.S. gold futures were down 0.1 percent at $1,197.90 an ounce.

* Emerging markets stocks and currencies were under added pressure on concerns about inflation in Turkey and after data showed South Africa had slumped into recession in the second quarter. U.S. President Donald Trump could follow through on plans to impose levies on $200 billion more of Chinese imports after a public comment period on his proposed new tariffs on Chinese goods is set to end on Thursday. U.S.-Canada trade talks were expected to resume on Wednesday after the last round ended on Friday with no deal to revamp the North American Free Trade Agreement (NAFTA). Trump has told Congress he would sign a bilateral trade pact with Mexico. Gold has lost about 8.5 percent this year amid rising U.S. interest rates, trade disputes and the Turkish currency crisis, with investors parking their money in the dollar.

* Spot gold XAU= may break a support at $1,190 per ounce and fall towards $1,179, as suggested by its wave pattern, a projection analysis and a falling channel. U.S. Treasury yields rose to three week highs on Tuesday after data showed that U.S. manufacturing activity accelerated to a more than 14-year high in August, and on heavy corporate debt supply. U.S. manufacturing activity accelerated to more than a 14-year high, boosted by a surge in new orders, but increasing bottlenecks in the supply chain because of a robust economy and import tariffs could restrain further growth. Holdings in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, fell 1.09 percent to 746.92 tonnes on Tuesday from Friday.

* India raised gold holdings by 6.8 tonnes to 573.1 tonnes in 2018 July, data from International Monetary Fund showed. South African precious metals producer Sibanye-Stillwater SGLJ.J said on Tuesday that it was launching a tender offer worth up to $400 million to buy back some of its bonds.

Latest comments

Moreover, even on the subject of GLD's insurance, they are not at all straightforward about it. Their representatives will not confirm nor deny the existence of GLD's insurance. I recommend anyone curious about this to confirm via calling GLD's publicly listed number for general inquiries at 866 320 4053 and ask about this clause from the GLD prospectus: "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." Exactly how much of the fund is insured? They will not give you a straight answer and might even throw in some bizarre excuse which I've experienced. Why hide this information from investors? The people behind GLD certainly do not seem like the most honest types.
"746.92 tonnes". . I never see any verifiable evidence to support any of these GLD claims. How reliable are GLD's holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loophole in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor to the fund.. . I remember there was a highly publicized visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities.
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