Gold retreats from one-year high as dollar gains ground

Updated: Mon, Sep 11, 2017
10:08 am
Reuters
RELATED NEWS
Ganesh Dutt assumes charge as chairman of HIMFED Ganesh Dutt assumes charge as chairman of HIMFED
Manufacturing growth: India set to see a slowdown? Manufacturing growth: India set to see a slowdown?
RBI rate hike ahead of monetary policy meet likely; may hurt overall growth RBI rate hike ahead of monetary policy meet likely; may hurt overall growth
RBI against separate regulator for payments system; issues dissent note RBI against separate regulator for payments system; issues dissent note
RBI's efforts to stabilise rupee drains $5.14 bn from forex reserve RBI's efforts to stabilise rupee drains $5.14 bn from forex reserve

Gold fell early on Monday after hitting its highest level in over a year in the previous session, as the dollar recovered from last week`s lows and as lack of geopolitical developments dented safe-haven appeal.

Spot gold was down 0.7 percent at $1,337.61 an ounce by 0357 GMT. It rose to $1,357.54 on Sept. 8, the highest since Aug. 16, 2016.

U.S. gold futures for December delivery were also down 0.7 percent at $1,341.70 an ounce.

"The major determinant of gold last week was actually geopolitical tensions, but over the weekend, we did not see any crisis triggering event so we`re going to have less chances for gold prices in the upward direction," said Mark To, head of research at Hong Kong`s Wing Fung Financial Group.

The U.S. dollar won a reprieve from risk aversion on Monday and pulled away from last week`s 2-1/2 year low after North Korea held a party over the weekend rather than launch another missile.

"I would go long on the dollar for one week or so, but not for too long because the major determinants, the geopolitical tensions, are still with us and the slowing of interest rate hikes and other tightening measures are going to be with us as well," To said.

Federal Reserve policymakers are expected to discuss balance sheet shrinkage at their next meet from Sept. 19 to 20 in Washington and are widely expected keep interest rates unchanged.

It is too soon to predict when the Fed should next raise rates as it continues to tighten policy, given "cross currents" in the economy and markets, New York Fed President William Dudley said on Friday.

Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

Spot gold may break a support at $1,332 per ounce and fall more to the next support at $1,317, said Reuters technical analyst Wang Tao.

Speculators raised their net long position in COMEX gold for the eighth straight week to the highest in nearly a year in the week to Sept. 5.

Holdings of SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, fell 0.3 percent to 834.50 tonnes on Friday.

In other precious metals, silver was down 0.5 percent to $17.84 an ounce after touching its highest since April in the previous session.

Platinum was down 0.7 percent at $997.75 an ounce while palladium was 0.4 percent higher at $938.22 an ounce.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

By continuing to use the site, you agree to the use of cookies. You can find out more by clicking this link

Close