Strengths
The best performing precious metal for the week was platinum with a price surge of 5.09 percent. On Tuesday, South African news reported that plans are underway to manufacture more forklifts powered by hydrogen for local and international markets. Legislation in 2007 created the Hydrogen South Africa Strategy to develop vehicles powered by hydrogen through the utilization of the country’s platinum group metal resources. In a drop that could signal a buying opportunity, the net-long position in gold futures and options held by hedge funds and large speculators fell to the smallest level in more than seven months, in the third straight week of contraction. China raised bullion imports from Hong Kong for the first time in four months in September, according to data from the Hong Kong Census and Statistics Department. Investors have sought to diversify their assets while facing a weakening yuan. Net purchases were 44.9 metric tons, compared to 41.9 tons in August. This weekend is a key time for gold demand, with the Hindu festival of Diwali and Dhanteras on October 28, which is considered the most auspicious day of the year to buy gold. Goldman Sachs also noted that Chinese demand has potential to rise if the yuan continues to decline. Also supporting the potential for strong demand is the Indian government’s consideration of reducing its import tax on gold to 6 percent from 10 percent. This decision may take place in the third week of November.
This post was published at GoldSeek on 1 November 2016.
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