Monday, October 9, 2017

Gold claws back nearly $10 as China returns to gold market following week long holiday

There are a few holidays in China that offer ripe opportunities for the manipulators of the gold markets to have free reign to drive down prices.  And the two most important ones are the Chinese New Year, and their most recent Golden Week observance.

Last week gold prices fell over $25 from $1290 to $1265 because of limited trading in Asia, comments by central bankers, as well as false interpretations of Friday's job report.  But ever since the beatdown in early trading on Oct. 6, the price has quickly risen from its Friday low to claw back more than $10 to its current level of $1280 here on Monday.

Gold (XAU/USD) prices clocked a 8-day high of $1283.50 in Asia on the back of weak China services PMI and renewed North Korea fears
The safe haven yellow metal took out the 4-hour 50-MA hurdle earlier today. The bid tone strengthened in response to comments from North Korea's leader Kim Jong Un that his nuclear weapons were a "powerful deterrent" that guaranteed its sovereignty. 
Reports had hit the wires on Friday that  Pyongyang is preparing to test a long-range missile, which it believes can reach the west coast of the United States. 
The uptick seen today in gold prices could be a delayed reaction to Friday's NKorea news as the yellow metal remained calm ahead of the weekend, while the Yen had rallied. The tables have turned today as the Japanese Yen has surrendered gains, while gold is on the rise. 
Also helping the yellow metal is the signs of slowdown in the economic activity in the world's second largest economy. China September Caixin PMI came-in at a 21-month low of 50.6. – FX Street


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