Market Nuggets
Lack of physical gold demand in Asia is weighing on the metal: Commerzbank
(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."
