Breaking News

PRECIOUS-Gold at 5-week low on firm dollar, Brexit talks lend support

EconomyJun 19, 2017 14:50
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. PRECIOUS-Gold at 5-week low on firm dollar, Brexit talks lend support

* Gold ETF (NYSE:GLD) holdings fall after Fed raised rates

* Gold falls below 100-day moving average

* Falling car sales in China, U.S. to undermine palladium (Updates prices; adds comment, second byline, NEW YORK dateline)

By Marcy Nicholson and Pratima Desai

NEW YORK/LONDON, June 19 (Reuters) - Gold fell to a near five-week low on Monday as the dollar rose after hawkish comments from a top Fed official, but uncertainty created by the start of talks on the terms of Britain's departure from the European Union prevented deeper losses.

Spot gold XAU= was down 0.7 percent at $1,244.85 an ounce by 2:35 p.m. EDT (1835 GMT), after falling below the 100-day moving average to $1,244.27, its lowest since May 17. U.S. gold futures GCcv1 settled down 0.8 percent at $1,246.70.

New York Federal Reserve President William Dudley said U.S. inflation is a little low but should rise alongside wages as the labor market improves, allowing the Fed to continue gradually tightening U.S. monetary policy. potential for higher rates reinforced the uptrend in the dollar .DXY , which, when it rises, makes dollar-denominated commodities more expensive for holders of other currencies, potentially weakening demand. FRX/

"The dollar is a large part of what's going on with gold," said ING commodities strategist Warren Patterson. "I do see some support from uncertainty about the UK government and the start of Brexit negotiations."

British Prime Minister Theresa May's failure to win a parliamentary election this month has, alongside Brexit negotiations starting on Monday in Brussels, fueled political uncertainty. on gold is a drop in holdings of physically backed exchange traded funds. The biggest, SPDR Gold Trust HLDSPDRGT=XAU , saw holdings decrease by 1.5 percent last week, the biggest weekly outflow in three months. GOL/ETF

"The Fed continued to signal one additional hike in 2017, but the market is only pricing in a 35 percent probability of a further 25 bps increase this year," said Standard Chartered (LON:STAN) in a note, referring to the U.S. Federal Reserve's statement last week.

"The potential hikes, including their speed and magnitude, have limited gold's upside risk in our view, and expectations being scaled back bode well for prices later in the year."

Elsewhere, palladium XPD= was down 0.3 percent at $858.49 an ounce. Prices hovered below a 16-year high but analysts say palladium's gains of more than 25 percent so far this year may not be justified given slowing auto sales.

"There are some concerning signals from the two largest gasoline (palladium) auto markets, the U.S. and China," ICBC Standard Bank analysts said in a note.

"The pace of sales growth in both countries has slowed sharply this year."

U.S. and Chinese passenger car sales fell in May from a year earlier. XAG= lost 0.3 percent to $16.54 an ounce and platinum XPT= slid 0.6 percent to $918.55 an ounce.

PRECIOUS-Gold at 5-week low on firm dollar, Brexit talks lend support

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Write your thoughts here
Replace the attached chart with a new chart ?
Post also to:
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email