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Gold eases as dollar ticks up

Updated September 14, 2017

LONDON: Gold dipped on Wednesday, erasing earlier slim gains as the dollar index moved into positive territory, though a retreat in global stocks after Tuesday’s record high kept the metal hemmed within a narrow range.

Spot gold was down 0.4 per cent at $1,326.07 an ounce at 1410GMT, off an earlier peak of $1,334.65. The metal’s move lower came as the dollar erased earlier losses to rise 0.4 per cent versus a basket of currencies.

A firmer dollar makes gold more expensive for holders of other currencies. “This seems to be currency led,” Saxo Bank’s head of commodity research Ole Hansen said. “I’m somewhat surprised that gold managed to find support ahead of $1,321.50, the 23.6 per cent retracement of the July to September rally, but with (North Korean leader) Kim vowing to keep pushing his nuclear ambitions, the geo-risk is never far away.”

Demand for gold, seen as a safe investment in uncertain times, revived earlier after US President Donald Trump pledged stronger measures against North Korea and Pyongyang promised to fight off what it said was the threat of a US invasion.

Concerns over North Korea’s nuclear ambitions were a key factor driving spot gold prices to 13-month highs last week at $1,357.54 an ounce. A softening in those worries helped lift equities to record highs early this week. US gold futures for December delivery were down $2.90 an ounce at $1,329.80.

Among other precious metals, silver was flat at $17.90 an ounce. The metal reached its highest since early April on Friday at $18.208 an ounce.

Published in Dawn, September 14th, 2017