Make Kitco Your Homepage

Lack of physical gold demand in Asia is weighing on the metal: Commerzbank

Kitco News

Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!

(Kitco News) Investor demand is keeping gold from sliding below $1,900 an ounce, but weak physical demand out of Asia is keeping a lid on the precious metal's gains, according to Commerzbank. "Gold is continuing to lack support from physical gold demand in Asia. Swiss trade data had revealed last week that gold demand in India and China was still rock bottom in September. This is likely to be confirmed by the World Gold Council this week when it publishes the demand trends for the third quarter on Thursday. This will probably prove to be the weakest quarter this year. Gold is still finding support from investment demand, however, which is presumably preventing the price from sliding," writes Commerzbank analyst Daniel Briesemann. This week, gold continues to trade around the $1,900 an ounce level as the U.S. dollar sees some strength. "The political parties in the U.S. have still failed to reach any agreement on a new aid package for the U.S. economy, which has caused the U.S. dollar to appreciate slightly and appears to be precluding any rise in gold prices," Briesemann says. "It appears increasingly unlikely that an agreement will be achieved and a bill subsequently approved before the U.S. presidential elections in a good week's time."

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Precious Metal Charts

Follow Kitco News