Gold: The air is out

At the moment the gold price is somewhat wormed, even the weak US dollar cannot support it.

London/ Frankfurt ( – The gold price moves since some days in the sideways mode between 1,473 and 1,508 dollar/ounce with tendency downward. In view of the weak dollar this is at least unusual. The external value of the Greenback has been falling for days and weeks. The US Dollar Index has fallen by around two percent since the end of September. A weaker dollar should actually support the gold price according to the general view.


But the development of gold is subject to several factors. There is the influence of investors and big speculators. Gold is currently less in demand as a safe haven. There is growing hope on the market that a partial agreement between the USA and China will be signed in November. At the same time, confidence remains that a no-deal brexit can still be avoided. In addition, the US reporting season has got off to a good start so far, with US equities in fairly good demand in recent days. Higher US yields and weak inflation are other reasons why gold is less in focus at the moment.

There is a headwind from speculative investors. Interest in gold futures is declining. According to the CFTC report, the number of open contracts fell from 617,000 to 607,400 in the week ending 15 October. There was a stronger setback in the cumulative net long position of large and small forward speculators. Within a week, a minus of 310,900 to 288,300 contracts occurred. On the other hand, price declines are used by ETF investors to enter. At the beginning of the week there were new inflows of 2.6 tonnes into the gold ETFs covered by Bloomberg, as analysts from Commerzbank reported. Since the beginning of the month, inflows have totalled 33 tonnes, with only two trading days of outflows.