January 29, 2018 / 5:43 AM / a year ago

PRECIOUS-Gold dips as U.S. dollar, equities strengthen

    * Spot gold may drop to $1,335/oz - technicals
    * Asia-Pacific shares outside Japan aim for 12th session of
gains

 (Updates prices)
    By Nithin ThomasPrasad
    Jan 29 (Reuters) - Gold prices eased on Monday as the U.S.
dollar gained some lost ground and continued gains in equities
weighed on the bullion.
    However, the yellow metal hovered near a 17-month high hit
last week as the greenback hit a three-year low after U.S.
Treasury secretary Steven Mnuchin backed a weaker currency.
    Spot gold        was down 0.2 percent at $1,347.60 per
ounce, as of 0739 GMT.
    U.S. gold futures         for February delivery slipped 0.5
percent to $1,345.80 per ounce.
    The U.S. dollar is trying to climb back up and that is
weighing on gold currently, according to Ronald Leung, chief
dealer at Lee Cheong Gold Dealers in Hong Kong.
    "There is a lot of dollar-related buying and selling in the
gold market right now."
    The dollar crawled up from lows but struggled to pull ahead
from six straight weeks of losses on its evaporating yield
advantage and doubts about Washington's commitment to a strong
currency.           
    A stronger dollar makes bullion more expensive for holders
of other currencies. 
    Earlier in the session, the dollar index against a basket of
six major currencies       ,        rose 0.2 percent to 89.215,
extending its rebound from 88.429, a three-year nadir set on
Thursday.
    Meanwhile, Asian shares extended their bull run amid upbeat
corporate earnings and strong global economic growth.
               
    "However, gold's weakness due to a stronger dollar and
equity markets could be temporary," said Hareesh V, head of
commodity research, Geojit Financial Services. 
    "Gold will touch the $1,400-an-ounce level again as long as
it doesn't break the $1,260 mark." 
    The yellow metal had dropped below the $1,400-an-ounce level
in Sept. 2013 and has not crossed above the level since.
    "The recent strength in equity markets has been keeping gold
prices from going higher. When equities start to come down, gold
will definitely be the first gainer," Hareesh added. 
    "So, technically, we see a rally, but it has to break the
$1,400 mark first – it's a very critical level."     
    Spot gold may drop to $1,335 per ounce, as a support at
$1,347 may not hold, according to Reuters technical analyst Wang
Tao. 
    In other precious metals, silver        fell 0.4 percent to
$17.33 per ounce. It rose about 2.3 percent last week, its
biggest weekly gain for the year, so far. 
    Platinum        slipped 0.5 percent to $1,004.74 per ounce,
after dipping 0.3 percent last week in its first weekly decline
in seven. 
    Palladium        declined 0.4 percent to $1,087.70 per
ounce. In the previous session, it touched $1080.00, its lowest
since Jan. 11. 

 (Reporting by Nithin Prasad in Bengaluru, Editing by Richard
Pullin and Sherry Jacob-Phillips)
  
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