Reuters logo
in 4 months
PRECIOUS-Gold slips on firmer dollar; political uncertainty supports
March 30, 2017 / 10:06 AM / in 4 months

PRECIOUS-Gold slips on firmer dollar; political uncertainty supports

3 Min Read

    * Silver falls from four-week high
    * Dollar index rises to nine-day peak

 (Updates prices; adds comment, byline, NEW YORK dateline)
    By Marcy Nicholson and Zandi Shabalala
    NEW YORK/LONDON, March 30 (Reuters) - Gold dipped on
Thursday as the dollar strengthened, but losses were capped by
continuing economic uncertainty around Britain's departure from
the European Union and approaching French elections.
    The potential for the rise of the far right in European
elections this year, along with British Prime Minister Theresa
May formally triggering divorce proceedings from the EU on
Wednesday has served to enhance gold's appeal as a safe-haven
investment, negating some of the effects of a strong dollar.
            
    "We might see support from the French elections if the first
round surprises us by the results being better than expected for
(far right leader) Marine Le Pen. That might give a little bit
of a boost for gold," said Bernard Dahdah, a precious metals
analyst at Natixis. 
    Spot gold        was down 0.5 percent at $1,245.41 an ounce
by 1:54 p.m. EDT (1754 GMT) and U.S. gold futures        
settled down 0.7 percent at $1,245.
    "The market seemed to take the notification of the
(triggering of) Article 50 in the UK relatively smoothly, but I
suspect the worst is yet to come on that," said ANZ analyst
Daniel Hynes.
   "But certainly, there was a tiny bit of safe-haven buying."
    The dollar rose to a nine-day high against a basket of
currencies on Thursday. A stronger greenback makes
dollar-denominated gold more expensive for holders of other
currencies, potentially lowering demand.       
    The dollar was also boosted by Chicago Fed President Charles
Evans, who said he was in line with most of his colleagues in
supporting further interest rate increases this year.
            
    "The market has priced in two interest rate increases this
year, but if we see three there could be downside pressure
towards gold prices," said ETF Securities analyst Nitesh Shah.
    Still, RBC Capital Markets sees support for bullion prices.
    "Whether a good indicator or not, we think the U.S.
healthcare legislation saga led the market to at least partially
rethink the prospects of broad reforms across tax, trade, and
other economically relevant policies in the U.S.," RBC said in a
note.
    "Between this and the UK triggering Article 50, we think
there are plenty of risks on both sides of the Atlantic in 2017
to keep gold supported at current (or somewhat higher) levels
despite a number of otherwise bearish macro headwinds."
    In other precious metals, spot silver        slipped 0.2
percent to $18.16 an ounce, having hit a four-week high of
$18.29.
    Platinum        turned down 0.06 percent to $950.95, while
palladium        was up 0.8 percent at $796.50.

 (Additional reporting by Arpan Varghese and Swati Verma in
BENGALURU; Editing by David Goodman and Tom Brown)
  

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below