October 3, 2016
Gold Holds Last Week’s Decline as Deutsche Bank Concerns Ebb
Gold held a weekly decline as Deutsche Bank AG works to mend its finances, eroding demand for haven assets, and as investors weigh the British Prime Minister’s comments on Brexit.
Bullion for immediate delivery was 0.1 percent lower at $1,314.47 an ounce at 12:58 p.m. in Singapore, according to Bloomberg generic pricing. The metal lost 1.6 percent last week, dropping on four out of five days. China’s markets are closed this week.
Concerns over Deutsche Bank’s financial health are ebbing, helping to lift Asian equities. Agence France-Presse reported on Friday that the German lender is nearing a pact to pay the U.S. Department of Justice $5.4 billion, less than half the initial amount requested, to settle a probe related to bad mortgages. The bank is also poised to reach an agreement with labor representatives to cut jobs, people with knowledge of the matter told Bloomberg News.
Britain’s Theresa May said she’ll begin the process of withdrawal from the European Union in the first quarter of 2017, which hurt the pound. U.S. payrolls data due later this week will give further clues on the U.S. Federal Reserve’s next policy move. Odds on a rate hike by December are near 60 percent, according to Fed funds futures.
“The Brexit will once again be a focal point after May set March 2017 as a deadline for triggering of Article 50,” Bryan Lum, a Singapore-based strategist with Phillip Futures Pte, said in an e-mail. “Markets will continue to assess the state of the U.S. economy as well, given the release of nonfarm payrolls this Friday. With markets biased toward a December rate hike, a weak number here could dampen expectations and see prices rally in response.”
Holdings in exchange-traded funds backed by gold added 1 metric ton to 2,032 tons on Friday, according to data compiled by Bloomberg.
Bullion of 99.99 percent purity rose 0.1 percent to 284.95 yuan a gram ($1,329.39 an ounce) on the Shanghai Gold Exchange.
Spot silver dropped 0.5 percent, platinum fell 0.6 percent and palladium retreated 0.4 percent.