LONDON: Gold climbed on Wednesday as funds bet prices would find short-term support at $1,200 per ounce, but a stronger dollar and expectations for increases in US interest rates limited gains.
Spot gold was up 0.1 per cent at $1,204.43 an ounce at 1050 GMT. Prices hit their highest since August 10 at $1,214.28 on Tuesday, but closed 0.8pc lower as US Treasuries rose after the United States and Mexico struck a trade deal.
Analysts and traders are closely watching the psychologically important level of $1,200. Gold dipped below that this month for the first time since March 2017, giving it momentum to touch a low of $1,159.96.
“Gold is a tad higher now because we have managed to find support at $1,200 and that is attracting some intra-day bids at this stage,” said Saxo Bank analyst Ole Hansen.
Gold is still pinned down by a stronger dollar, which makes commodities it is priced in more expensive for holders of other currencies and can cap a rising gold market.
Higher rates would dent the appeal of non-interest yielding gold.
The first support is at $1,200 per ounce and the next key level is $1,180, said ActivTrades chief analyst Carlo Alberto De Casa. A rise above $1,210 would be a first positive impulse, he added.
Gold prices are on track to fall for the fifth straight month, which would make it the longest losing streak since early 2013.
US gold futures were down 0.3pc at $1,210.60.
Holdings in the largest gold-backed ETF, SPDR Gold Trust GLD, have declined 3.6 million ounces from a peak in late April.
Spot silver was up 0.2pc at $14.67.
Platinum rose 0.4pc to $788.60, while palladium was 0.4pc higher at $938.25 after hitting a seven-week top at $956 on Tuesday.
Published in Dawn, August 30th, 2018