Gold eased this morning to trade at 1316.40 as traders booked profits as silver dipped 87 points to trade at 20.877. Platinum gained $4.35 to reach 1461.90 as miners settled the long on going strike. Gold prices continued its positive run on Monday on weak US equities and increasing violence in Iraq. The metal hovered near its two-month high of $1,321.90 after posting its biggest weekly gain in three months last week. The yellow metal extended last week’s 3 percent gain as Iran’s supreme leader accused the United States on Sunday of trying to retake control of Iraq by exploiting sectarian rivalries, as Sunni insurgents drove toward Baghdad from new strongholds along the Syrian border. Silver prices declined on Monday diverging from gains in gold prices as weakness in prices and profit booking at higher levels acted as a negative factor. Weakness in the dollar index however cushioned sharp downside in prices.
Gold has been boosted recently by escalating violence in Iraq, where Sunni tribes have joined a militant takeover of northern Iraq. Secretary of State John Kerry on Monday promised “intense and sustained” U.S. support for Iraq, but said the divided country would only survive if its leaders took urgent steps to bring it together. Investor sentiment towards gold, often seen as an investment-hedge, has improved with SPDR Gold Trust (ARCA:GLD), the world’s top gold-backed exchange-traded fund, notching a 2.4 ton increase in holdings to 785.02 tons on Monday. Russia’s gold reserves rose to 34.7 million troy ounces in May from 34.4 million troy ounces in April. Traders can expect precious metal prices to remain up for the day as increasing tensions in Iraq and Ukraine can push prices higher. Gold stood above 1,300 dollars on crisis in Iraq last week. But analysts doubt whether gold’s gain above 1,300 dollars can last, citing currently sluggish physical demand for the precious metal as well as decline in demand from exchange-traded funds. The HSBC predicted gold price at 1,292 dollars per ounce at the end of this year.
Copper prices eased by 8 pips after climbing steadily over the past few trading session. Copper is trading at 3.13. A summary of China’s base metal imports for May shoed that copper ore and concentrates imports fell last month responding to a negative arbitrage in March. Refined copper imports were up on a yearly basis in May, although they were at their lowest level in 2014. “Some longs are leaving the market after gains in the past sessions. The weekly rise for copper last week was the biggest for this year,” Xu Maili, chief metal analyst at Everbright Futures in Shanghai, said. The three-month copper recorded a gain of 2.7% in the past week.
“It seems copper prices have fully priced in the latest healthy China manufacturing data or may have overdrawn the boost,” Xu said. The HSBC China flash purchasing managers index (PMI) was in expansion territory for the first time this year, with the index reading at 50.8 in June, data released on Monday June 23 showed.