March 29, 2017 / 4:08 AM / 6 months ago

PRECIOUS-Gold slips on technicals; U.S. rate hike cues lift dollar

    * Holdings of SPDR Gold Trust       drop on Tuesday
    * Silver off near one-month high hit in previous session

 (Updates prices, adds comment)
    By Arpan Varghese
    March 29 (Reuters) - Gold inched down on Wednesday in the
face of a key technical resistance and talks on further rate
hikes this year saw the dollar move away from multi-month lows
amid rising equities.
    "A resurgent U.S. dollar, along with higher U.S. yields and
equities has taken the momentum out of the gold rally for now,"
said Jeffrey Halley, senior market analyst at OANDA.
    The metal was also under pressure after failing to break
through its 200-day moving average at $1,260, Halley said,
posting its second consecutive down day in Asia.
    Spot gold        was down 0.1 percent to $1,250.75 per ounce
at 0714 GMT. U.S. gold futures         slipped 0.5 percent to
$1,249.8.
    Reinforcing rate hike expectations, U.S. consumer confidence
index hit 125.6 in March, surpassing expectations for a reading
of 114 and much higher than 116.1 in February. The March level
marked the highest since December 2000.              
    The dollar bounced from multi-month lows as a top U.S.
Federal Reserve official talked of more rate hikes to come.
      
    Fed Vice Chairman Stanley Fischer, one of the more
influential policymakers with markets, said two more rate
increases this year seemed "about right".             
    "Perhaps the expectations of a June rate hike have gone up,
given the recent statements from the central bank officials,"
said Jiang Shu, chief analyst at Shandong Gold Group.
     A strong greenback makes dollar-denominated gold more
expensive for holders of other currencies, potentially
decreasing demand.          
    Meanwhile, holdings of SPDR Gold Trust      , the world's
largest gold-backed exchange-traded fund, which is considered a
gauge of investment demand, reported an outflow of 1.8 tonnes on
Tuesday.          
    Gold prices could continue to be slightly pressured into the
next month or so, especially as the market awaits key economic
data from the United States for further clarity on U.S. interest
rate hikes, Shu said.
    Gold bullion investment will rise for the fourth straight
year in 2017 as global political and economic factors are
forecast to maintain buying interest, CPM Group said on Tuesday.
            
    "As for the balance of this week, we think that gold will
stabilize and possibly push higher given that Tuesday's advance
in equities did not have much of an impact in slowing its upward
momentum," INTL FCStone analyst Edward Meir said in a note.
    "In addition, technicals still look constructive, just as
physical demand seems to be improving, particularly out of
India."
    In other precious metals, spot silver        slipped as much
as 0.4 percent to $18.10 per ounce. In the previous session, the
metal hit $18.24, the highest since March 2.  
    Platinum        rose up to 0.6 percent to $953 per ounce,
while palladium prices        were down 0.3 percent to $790 an
ounce.

 (Reporting by Arpan Varghese in Bengaluru; Editing by Sherry
Jacob-Phillips and Richard Pullin)
  

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