Published: Sun, May 13, 2018
Economy | By

Gold steady as dollar hovers below 2018 peak

Gold steady as dollar hovers below 2018 peak

In addition to the weaker U.S. Dollar, which tends to make dollar-denominated assets like copper a more attractive asset, prices rose on Thursday on falling inventories and signs of strong demand in top consumer China.

The weaker-than-expected April consumer price data on Thursday helped to knock the dollar from 2018 highs and push U.S. bond yields down. The metal was, however, still on track to register a first weekly rise in four. The contract settled Thursday at $1,322.30 an ounce-marking the highest finish for a most-active contract since April 27.

Gold was set for its first weekly gain in four weeks on Friday after soft U.S. inflation data suggested that the Federal Reserve might show caution on the pace of interest rate rises.

Turner added, however, that the dollar was the main driver for gold and he expects the precious metal to come under pressure in the near term, with the dollar extending its rally.

Today, gold prices continue to move lower.

The dollar slipped slightly from a 4½-month peak hit as long-term US Treasury yields held near the psychologically important 3% level.

Gold prices nudged lower on Thursday as the dollar held near its 2018-peak.


United States consumer prices data due at 1230 GMT is expected to show that annual core CPI inflation rose to its highest in more than a year in April, strengthening the case for the Federal Reserve to raise interest rates. What's more, inflation can be a mixed theme for gold. At the same time, gold's traditional role as an inflation hedge can kick in for some investors. "From here, a push through minor barriers in the $1,323.60-$1,333.42 area opens the door for a challenge of resistance defining the broadly bearish bias since the beginning of the year", he said.

As for other precious metals, silver for July delivery fell 2.3 cents, or 0.14 percent, to settle at 16.472 dollars per ounce.

Spot gold eased 0.2 per cent to $1,318.85 per ounce at 0553 GMT, after rising to the highest since end-April at $1,322.76 in the previous session.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.14 percent to 862.95 tonnes on Wednesday from 864.13 tonnes on Tuesday.

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