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PRECIOUS-Gold retreats as dollar firms, risk appetite improves

Published 2019-03-06, 09:33 a/m
© Reuters.  PRECIOUS-Gold retreats as dollar firms, risk appetite improves
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(Adds comments, updates prices)

* SPDR gold holdings down 2.7 pct this year

* Market awaits ECB's policy meeting, U.S. non-farm payrolls data

* OECD cuts global growth forecast for 2019/2020

* Platinum to see largest surplus since at least 2013- WPIC

By Arijit Bose

March 6 (Reuters) - Gold inched lower on Wednesday, holding near a five-week low as a firm dollar and improved appetite for riskier assets dented the appeal of bullion, while investors awaited further clarity on the U.S.-China trade dispute.

Spot gold XAU= was down 0.1 percent to $1,285.61 per ounce at 1419 GMT, close to its lowest since Jan. 25 at $1,280.70 hit in the previous session. U.S. gold futures GCv1 were up about 0.2 percent at $1,286.70.

"A major bearish element for the gold market recently has been the generally upbeat investor attitude in the world (equity) markets, that have been in rally-mode," Jim Wyckoff, senior analyst at Kitco Metals, said.

"The U.S. dollar index has seen a very strong rebound from last week's lows. The resurgence of the dollar index gives a bearish underlying factor that is prompting some selling interest in the gold market."

Global equities have staged a remarkable comeback in the first two months of the year, rising about 16 percent, indicating a marked improvement in demand for riskier assets. USD/ MKTS/GLOB

The dollar .DXY hovered near a two-week high hit in the previous session, making gold more expensive for holders of other currencies.

A signifier of investor sentiment, holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded-fund languished near their lowest since mid-December last year. Holdings have fallen about 2.7 percent this year. GOL/ETF

Also impeding gold were U.S. Treasury yields that inched up off lows after private payrolls processor ADP (NASDAQ:ADP) offered a sharp revision to its January jobs estimates. the overall positive momentum for bullion was intact, analysts said, with metal supported by concerns about a slowdown in the global economy, aggravated by poor growth figures from Australia and a contracted growth target in China. the Organisation for Economic Co-Operation & Development cut forecasts again for the global economy in 2019 and 2020, citing trade rows and Brexit uncertainty. drop in gold prices will be reversed by the end of 2019 as fresh concerns about slower global growth coupled with the fall that we expect in U.S. equities once again push risk appetite in gold's favour," Capital Economics analyst Ross Strachan said in a note.

Investors will now closely monitor European Central Bank's monetary policy meeting on Thursday and U.S. non-farm payrolls data on Friday.

Elsewhere, palladium XPD= fell 0.4 percent to $1,509 per ounce. Spot silver XAG= fell 0.3 percent to $15.08 after slipping to its lowest since Dec. 27 in the previous session, while platinum XPT= fell 1 percent to $828.22.

The global platinum market will see its largest surplus since at least 2013 this year, the World Platinum Investment Council said, forecasting an oversupply of 680,000 ounces in 2019 after a surplus of 645,000 ounces last year.

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