Reuters logo
PRECIOUS-Dollar recovery pushes gold down from one-year high
September 11, 2017 / 10:25 AM / 2 months ago

PRECIOUS-Dollar recovery pushes gold down from one-year high

    * Dollar, U.S. bond yields rise sharply
    * Gold falls 1.2 percent, biggest drop since early July
    * Speculative net long at highest in nearly 1 year

 (Updates prices; adds comment, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Peter Hobson
    NEW YORK/LONDON, Sept 11 (Reuters) - Gold prices fell more
than 1 percent on Monday from the previous session's 13-month
high as relief that North Korea did not conduct a missile test
over the weekend helped to lift global stocks, the U.S. dollar
and bond yields.                                      
    Demand for safer assets, including gold, also weakened after
Hurricane Irma wreaked less damage in Florida than had been
feared.             
    Spot gold        was down 1.2 percent at $1,330.24 an ounce
by 1:54 p.m. EDT (1754 GMT), on track for its biggest one-day
drop since July 3. On Friday it touched $1,357.54, the highest
since August last year.
    U.S. gold futures         for December delivery settled down
1.2 percent at $1,335.70.
    Gold had rallied 1.6 percent last week on fears of a North
Korean missile launch and the impact of Irma on the U.S.
economy, helping to drive the dollar to its weakest since
January 2015 and U.S. bond yields to 10-month lows. 
    "Both of these events failed to materialize in a major way,"
said Saxo Bank analyst Ole Hansen. "The short-term stage has
been set for some consolidation (in gold prices). Much depends
on where the dollar and bonds decide to go." 
    The dollar strengthened on Monday, making gold more
expensive for holders of other currencies, potentially reducing
demand, while higher bond yields increase the opportunity cost
of non-yielding bullion.
    "It looks like speculators who had established positions to
take advantage of a possible rise in risk aversion, were left
disappointed as North Korea did not conduct another missile test
at the weekend," said Fawad Razaqzada, technical analyst for
Forex.com.
    "From a technical stand point, gold's weakness also makes
sense, but so far it can only be interpreted as a mere pullback
from overbought levels, rather than trend reversal." 
    North Korea on Monday warned the United States that it would
pay a "due price" for efforts to impose fresh sanctions on
Pyongyang.             
    In the week to Sept. 5, hedge funds and money managers
raised their net long position in COMEX gold futures and options
to the highest in nearly a year.             
    "The long to short ratio is above 20. We haven't seen that
for nearly five years," said Hansen.  
    In other precious metals, silver        fell 0.8 percent to 
$17.78 an ounce, down from Friday's five-month high of $18.21,
while platinum        was down 1.5 percent at $989.24.
    Palladium        was 0.1 percent lower at $935.75 an ounce.
            

 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Dale Hudson and Richard Chang)
  

Our Standards:The Thomson Reuters Trust Principles.
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