Gold price ekes out gain after Turkey downs Russian jet

New York (Nov 24)  Gold futures pushed modestly higher ahead of the US open amid a slightly weaker dollar, some short-covering and fresh geopolitical tensions after Turkey shot down a Russian fighter jet on the Turkey-Syria border. Gold for December delivery on the Comex division of the New York Mercantile Exchange was last up $7.30 or 0.68 percent at $1,073.90 per ounce. Trade has ranged from $1,068.10 to $1,075.40.

“The forex market is confused this morning as the geopolitical situation has become enervated by the news that Turkey has shot down a Russian jet over Turkish territory,” Dennis Gartman, editor of the Gartman Letter, said. The dollar reached 1.062 against the euro but was last was 0.07 percent softer at 1.0643, while Germany’s DAX and France’s CAC-40 were down 1.11 percent and 1.75 percent respectively. “It would appear to us, however, that the euro ran into formidable resistance as it approached 1.0665-1.0675 and that those who are not short of the euro should use this rather inexplicable strength to sell,” Gartman added.

Today’s US data will include preliminary GDP and the preliminary GDP price index, goods trade balance, S&P/CS Composite-20 HPI, CB consumer confidence and Richmond manufacturing index. More numbers are due tomorrow ahead of Thanksgiving on Thursday, when US markets will be closed. “We still cannot get too excited about the precious metals group here, as we don’t see any bullish variables coming to the fore other than a possible short-covering rally brought on by the fact that we are quite oversold, with gold’s RSI reading in the mid-20′s,” INTL FCStone’s Edward Meir said.

The Federal Reserve, meanwhile, held an unscheduled meeting overnight to review the discount rate – currently at 0.75 percent, it is the rate at which banks borrow from the regional Fed’s, is set by the board and is rarely used by the banks, MKS noted. “This is not the fed funds rate, which is set by the Federal Open Markets Committee, however, an increase in the discount rate would be interpreted as a signal of an impending December hike in the Fed Funds rate,” MKS added. As for the other precious metals, Comex silver for for December delivery were up 9.3 cents at $14.125 per ounce. Trade has ranged from $14.020 to $14.155.

Platinum futures for January delivery on the Nymex were down $3.40 at $844.00 per ounce, while the most-actively traded palladium contract was $543.50 per ounce, up $2.15.

Source: FastMarkets