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Gold steady

August 09, 2018


LONDON: Gold prices steadied on Wednesday, but expectations of a higher dollar due to rising US interest rates and strong demand for US Treasury bonds seen as a refuge from trade tensions are expected to weigh.

Spot gold was down 0.1 per cent at $1,209.91 an ounce at 1341 GMT compared with $1,204 hit last week, its lowest since March 2017. Prices are down more than 10pc since April. US gold futures were flat at $1,218.30.

A higher US currency makes dollar-denominated gold more expensive for holders of other currencies, which potentially would subdue demand. This relationship is used by funds to generate buy and sell signals from numerical models.

“The Fed is going to raise rates further this year, that will push up the dollar, a negative for gold,” said Quantitative Commodity Research analyst Peter Fertig.

On the technical front, first support comes in at $1,200, followed by $1,195, near the low seen in March 2017. Resistance is at the 21-day moving average currently sitting at $1,225.

Lack of investor interest can be seen in the holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, which at 25,319,951.65 ounces on Tuesday are at their lowest since August 2017.

Silver rose 0.4pc to $15.39 an ounce, platinum gained 0.1pc to $826.8 and palladium ceded 1.1pc to $895.7.

Published in Dawn, August 9th, 2018