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Gold remains unimpressed by US budget dispute



Commerzbank commodities research

Commerzbank commoditiesGold remains unimpressed by the US budget dispute and is trading this morning at around $1,310 per troy ounce. The situation in Washington appears to be in deadlock, with neither party willing to back down. Republican John Boehner, speaker of the US House of Representatives, even threatened at the weekend to risk the country going bankrupt if President Obama were not prepared to negotiate. The country’s debt ceiling will be reached mid-month, which could make the whole situation even worse. It is still not clear, however, to what extent these news which should be good for gold will really support it. The end of China’s Golden Week holiday could mean a rise in physical gold purchases as of tomorrow. At the same time, though, ETF investors are still selling. The gold ETFs monitored by Bloomberg have experienced outflows of almost 7 tons since the start of the month. In contrast, silver ETFs have seen an influx of 10 tons in the same period. Platinum ETFs too have reported an influx of some 16 thousand ounces – this due in part, no doubt, to the continuing strikes in South Africa. The radical union AMCU is still taking industrial action at the world’s number one platinum producer, Anglo American Platinum. By it’s own account, the company loses 3,100 ounces of PGM production per day as a result.

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