July 16, 2018 / 4:09 AM / 8 months ago

PRECIOUS-Gold prices buoyed by weaker dollar, Asian stocks

    * Investors await U.S. retail sales data
    * Spot gold may break support at $1,237/oz- technicals
    * Specs cut net longs in gold in week to July 10
    * Silver pulls away from 7-month low

 (Adds comment, updates prices)
    By Apeksha Nair
    BENGALURU, July 16 (Reuters) - Gold prices recovered from a
seven-month low on Monday, as the dollar traded below its recent
highs and after sluggish GDP data from China weighed on Asian
    Spot gold        was up 0.2 percent at $1,242.86 an ounce at
0730 GMT, after marking the lowest since Dec. 12 at $1,236.58 on
    U.S. gold futures         for August delivery were about 0.2
percent higher at $1,243 an ounce.
    "The CNH (Chinese yuan traded offshore) is a bit stronger
versus the dollar and that's giving gold some support," a Hong
Kong-based trader said.
    The absence of increased rhetoric out of Beijing or
Washington over the weekend likely gave the CNH a bit of
reprieve, the trader said, adding that technically gold was
under pressure and would still be sold on rallies toward $1,250.
    The dollar seesawed versus the Chinese yuan even as official
data on Monday showed China's GDP slowed in the second quarter
as expected. Against a basket of six major currencies       ,
the greenback traded below a 10-day peak.                    
    A weaker dollar makes greenback denominated gold cheaper for
holders of other currencies.
    Asian shares were lower on Monday after data pointed to
slowing growth in the world's second-largest economy, and as
investors remained cautious over the impact of the heated
Sino-U.S. trade war.             
    Gold prices, which can gain in times of political
uncertainty, have failed to benefit from the ongoing trade
    "The dollar has been traditionally a safe haven asset, and
could be re-positioned as such especially if risk events and
uncertainties continue to brew into the backdrop," said OCBC
analyst Barnabas Gan.  
    Meanwhile, investors are looking to June U.S. retail sales
data, due later in the day, to assess the state of the economy. 
    The Federal Reserve on Friday pointed to "solid" U.S.
economic growth during the first half of the year in its
semi-annual report to Congress, where it also reiterated that it
expected to continue to raise interest rates gradually.
    Higher U.S. rates tend to boost the greenback and push bond
yields up, weighing on non-interest bearing gold.
    Spot gold may break a support at $1,237 per ounce and fall
to the next support at $1,226, Reuters technicals analyst Wang
Tao said.             
    Hedge funds and money managers cut their net long position
in COMEX gold contracts to a 2-1/2-year low in the week to July
10, U.S. data showed on Friday.             
    In other precious metals, silver        was up about 0.2
percent at $15.80 an ounce, after hitting a seven-month low at
$15.67 in the previous session.
    Platinum        was down 0.3 percent at $823.50 an ounce,
while palladium        climbed 0.4 percent to $940.80.

 (Reporting by Apeksha Nair in Bengaluru; editing by Richard
Pullin and Subhranshu Sahu)
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