👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

PRECIOUS-Gold up from near 4-mth lows as stocks slide, dollar retreats

Published 2017-07-11, 03:30 p/m
© Reuters. PRECIOUS-Gold up from near 4-mth lows as stocks slide, dollar retreats
XAU/USD
-
XAG/USD
-
GC
-
SI
-
PA
-
PL
-

* Equities, dollar turn lower on email chain release

* Focus on speech by Fed's Yellen later this week

* Gold support at $1,200, resistance at $1,230 (Updates throughout, adds comment, NEW YORK dateline, byline)

By Chris Prentice and Pratima Desai

NEW YORK/LONDON, July 11 (Reuters) - Spot gold rose on Tuesday, off the previous day's near four-month lows, as a drop in equities drove safe-haven buying and the U.S. dollar retreated.

Spot gold XAU= was up 0.23 percent at $1,216.79 per ounce by 3:08 p.m. EDT (1908 GMT), near Monday's $1,204.45, its lowest since March 15. U.S. gold futures for August delivery GCcv1 settled up $1.5, or 0.12 percent, at $1,214.70 per ounce.

U.S. stocks and the dollar reversed gains after U.S. President Donald Trump's eldest son released an email chain which mentioned a top Russian government prosecutor offering the Trump campaign damaging information about Democratic rival Hillary Clinton. brief but sharp drop in equity markets caused safe-haven gold to bounce back this afternoon," said Fawad Razaqzada, a market analyst at Forex.com.

The weaker currency makes dollar-denominated commodities less expensive for holders of other currencies, which could subdue demand. FRX/

The greenback fell after hitting a four-month high against the Japanese yen on the past fortnight's 25-basis-point rise in 10-year U.S. government bond yields. FRX/

Traders awaited a speech from U.S. Federal Reserve Chair Janet Yellen later this week and any signs of tightening of monetary policy from the central bank.

Gold prices are down more than 6 percent from a seven-month high near $1,300 hit in June.

Perceptions that an era of ultra-cheap money is gradually ending have been reinforced by European Central Bank minutes showing policymakers are open to reducing monetary stimulus. Bank of Canada is expected to raise rates on Wednesday. Yellen is scheduled to deliver a semiannual monetary policy testimony to lawmakers on Wednesday and Thursday.

Higher U.S. interest rates and Treasury bond yields raise the opportunity cost of holding gold, which yields nothing and costs money to store and insure.

"Gold should recover from this latest pullback as the move higher in real rates is unlikely to be sustained and we see longer-term value around these levels," UBS analysts said in a note.

On the technical front, support for gold comes in at $1,200 followed by $1,195, near the low on March 10. Upside resistance comes in at the 200-day moving average near $1,230.

An investor retreat from gold can be seen in holdings of physically backed exchange-traded funds, which at 54.61 million ounces are down more than 1 percent since June 14. HLDTOTALL=XAU

Spot silver XAG= gained 1.09 percent at $15.80 per ounce, palladium XPD= was up 1.53 percent at $852.63 per ounce and platinum XPT= rose 1.58 percent to $853.05 per ounce.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.