Global gold prices steady on weak dollar, set for third week of gains
By Selene 0
Bengaluru: Gold prices held firm on Friday as the dollar was near its one-week low, keeping the metal on track for a third week of gains amid political uncertainties in the US and Europe.
Spot gold was steady at $ 1,238.16 per ounce at 8.51am, while US gold futures were down 0.2% at $ 1,239.
Gold is up 0.3% so far this week and has risen about 7.5% in 2017.
“Gold edged higher overnight on the back of a weaker dollar and lower US Treasury yields. Add in a drop in the equity market and you have the holy trinity for higher gold prices,” said Stephen Innes, senior trader at OANDA.
“However, dealers are extremely cautious about running the market higher as the March Fed rate hike debate will likely play out for the foreseeable future.”
Concern over US President Donald Trump’s policies, as well as elections in the Netherlands, France and Germany this year, fuelled gold’s rise to a peak of $ 1,244.67 on 8 February.
But the prospect of a stronger dollar and US Treasury yields after US Federal Reserve chair Janet Yellen said US interest rates may need to be raised in March dragged gold to $ 1,216.41 on Wednesday, its lowest since 3 February.
The dollar index, which measures the greenback against a basket of currencies, was at 100.490 on Friday. It hit a one-week low of 100.410 the day before.
“The greenback’s softness continues to provide support to the precious complex,” said MKS PAMP Group trader Jason Cerisola.
Spot gold may drop to $ 1,230 per ounce as its correction from the 8 February high of $ 1,244.67 may extend, according to Reuters technical analyst Wang Tao.
Holdings of SPDR Gold, the world’s largest gold-backed exchange-traded fund, have risen 5.6 percent so far this month, the most since June 2016.
“We don’t expect much in the way of market movements going into Friday’s session, but gold should nevertheless see something of a bid heading into the weekend,” said INTL FCStone analyst Edward Meir.
Spot silver dipped 0.2% to $ 18.06 an ounce. The metal hit its strongest since 11 November at $ 18.13 in the previous session. Platinum edged up 0.1% to $ 1,013.20
Palladium fell 0.6% to $ 787.45. The metal, used in emission-controlling catalytic converters for the automotive industry, touched its best since 24 January at $ 794.90 in the prior session. It has gained over 16% so far this year. Reuters
First Published: Fri, Feb 17 2017. 11 28 AM IST