July 20, 2018 / 11:04 AM / 3 months ago

PRECIOUS-Gold snaps losing run after Trump slams strong dollar

    * Trump's comments knock dollar from one-year high
    * Gold rises 0.6 pct but still down 1 pct this week
    * Technicals suggest gold to fall further
    * Silver, palladium on track for big weekly falls

 (Updates prices; adds comment, second byline, NEW YORK to
dateline)
    By Renita D. Young and Peter Hobson
    NEW YORK/LONDON, July 20 (Reuters) - Gold prices rose on
Friday from one-year lows hit the previous day and spot platinum
increased more than 3 percent after U.S. President Donald Trump
criticized the strength of the dollar and interest rate
increases by the Federal Reserve, pushing the greenback sharply
lower.                          
    Spot gold        gained 0.7 percent at $1,230.89 per ounce
by 1:40 p.m. EDT (1740 GMT) and U.S. gold futures        
settled up $7.10, or 0.6 percent, at $1,231.10 per ounce. 
    Platinum        gained 2.8 percent at $827 an ounce, earlier
rising 3.2 percent to $830.10, but on track to end the week
barely changed. Its Friday performance followed gold prices,
traders said.
    But gold was still down almost 1 percent this week, with
little sign of an end to the slide in prices that has knocked 10
percent off gold's value since mid-May.
    The stronger dollar makes gold more expensive for buyers
with other currencies. Higher interest rates tend to boost the
dollar and raise the opportunity cost of holding non-yielding
bullion.
    Bank of America Merrill Lynch said on Friday fears of a
trade war had seen global investors plough $5 billion into bonds
this week while pulling $1.2 billion from gold.             
    "There’s a good chance that if you start to see any change
in the stance on the dollar, rhetoric or comments from the Fed,
I think you would see gold bounce back (up) pretty hard," said
Michael Ellingston trader at U.S. Global Investors in San
Antonio.        
    Despite Trump's monetary policy intervention             
            , the dollar was still near one-year highs on Friday
as Fed Chairman Jerome Powell did nothing this week to counter
expectations of two more rate rises this year and said the
United States was poised for several more years of growth.
             
    Meanwhile, funds and money managers have cut their net long
position in Comex gold to a 2-1/2-year low, helping drive down
prices. 
    And gold-backed exchange traded funds tracked by Reuters
have cut their holdings by more than 5 percent since their 2018
peak in mid-May.                
    Gold on Thursday touched $1,211.08 an ounce, the lowest
since July last year. 
    On the technical front, support was at gold's July 2017 low
of $1,204.90 and Fibonacci resistance was at $1,234.70, analysts
at ScotiaMocatta said, adding that technical and momentum
indicators suggested prices would fall further. 
    Meanwhile, silver        gained 1.7 percent at $15.52 an
ounce but was still down nearly 2 percent this week.
    Palladium        gained 2.7 percent at $893 an ounce but was
set for a weekly loss of almost 5 percent.

 (Reporting by Renita D. Young and Peter Hobson
Editing by Kirsten Donovan and Chizu Nomiyama)
  
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