December Gold settles 1159.6, up $59.4 for the week ended August 17th through August 21st
Gold futures moved up for a third straight session to end at a six-week high on Friday, with investors seeking the safe haven appeal of the yellow metal as the riskier equity assets continued to decline sharply globally on mounting evidence that China is having a rough patch economically. For the week, gold futures gained about 4.2 percent. Some weak manufacturing data from China and the continued sell-off in the Chinese stock market added to the negative mood. Concerns about the outlook for the global economy continues to weigh on investor sentiment, after the Shanghai Composite Index plunged by another 4.3 percent. A preliminary survey by Markit and Caixin on Friday showed manufacturing activity in China to have slipped to a 6-1/2 year low. The Caixin manufacturing PMI declined to 47.1 in August from 47.8 in July. China's economic woes have been putting pressure on global stocks and have helped raise gold's safe haven appeal. Gold for December delivery, the most actively traded contract, gained $6.40 or 0.6 percent, to settle at $1,159.60 an ounce on Friday. Gold for December delivery scaled an intraday high of $1,167.90 and a low of $1,148.50 an ounce.
On Thursday, gold prices for December delivery surged $25.30 or 2.2 percent, to settle at $1,153.20 an ounce, on its safe haven appeal after global equities witnessed a massive sell-off with China in focus. Also dovish minutes from the July Federal Open Market Committee (FOMC) meeting this week have helped support gold prices, as markets have pushed back expectations of the Federal Reserve’s first rate hike. Shifting interest rate expectation, a weaker U.S. dollar and equity markets are expected to continue to drive gold prices higher. Technically, the 200 day moving average sits at 1189.0 basis December futures, while the 50 percent retracement from the 52 week high/low sits up at 1191.6. If we continue to see an unwinding in global equities and the greenback, look for gold to test these levels in the near term. Physical buying in both India and China have picked up at a moderate level as India nears its festival and wedding seasons. The world’s largest gold backed exchange traded fund, SPDR gold shares (NYSE:GLD), reported an inflow of 3.6 tons on Thursday, its first in more than a week. Those looking for upside exposure may consider buying the October gold 1190 call while selling 2 October 1250 calls for a price of 4.50 or in cash value $450.00 cost plus commissions and fees.
