June 28, 2018 / 10:50 AM / 4 months ago

PRECIOUS-Gold stays at six-month low despite dollar losing steam

    * Platinum hits fresh 2-1/2 year low
    * U.S. rate hike prospects also weighing on gold

 (Recasts, updates prices; adds comment, second byline; NEW YORK
to dateline)
    By Renita D. Young and Maytaal Angel
    NEW YORK/LONDON, June 28 (Reuters) - Gold fell to its lowest
level in more than six months on Thursday, as mounting pressure
from trade disputes and the expectation of higher U.S. interest
rates continue to weigh on bullion, despite the greenback losing
steam. 
    U.S.-driven trade confrontations hurt world stock markets
and U.S. and German debt yields on Thursday, while Wall Street
felt the additional brunt of a slump in health sector shares.
           
    The trade tensions pushed the dollar        to test a
one-year high against a currency basket, before it fell back as
rising inflation in some German regions prompted traders to buy
the euro.       
    A strong dollar makes dollar-priced gold costlier for
non-U.S. investors and while falling equities, seen as risky
assets, usually help safe-haven gold, they have failed to do so
this time.
    "There is some safe-haven demand going into gold but not as
much as is going elsewhere, like the dollar or treasuries or
safe-haven currencies like the franc," said Capital Economics
analyst Simona Gambarini. 
    Spot gold        declined 0.3 percent at $1,248.04 by 1:33
p.m. EDT (1733 GMT). Earlier, it touched $1,246.60, its lowest
since mid-December. 
    U.S. gold futures         for August delivery settled down
$5.10, or 0.4 percent, at $1,251 per ounce. 
    "There’s just too much pressure on gold. Until we see spike
in inflation or fall in the dollar, I think we’ll continue to
see pressure on the price of gold," said Chris Gaffney,
president of world markets at TIAA Bank.
    In a nod to dollar bulls, Boston Federal Reserve President
Eric Rosengren said the central bank should continue to raise
interest rates gradually to lower the risk of a major policy
error.                          
    "The dollar index's strength is mainly powered by hopes for
higher rates and rising yields and there seems to be no change
in this any time soon," said ThinkMarkets.com in a note.
    Higher yields make gold more expensive for users of other
currencies and less attractive to investors since it does not
yield interest.
    Investors are positioning for a potentially fraught meeting
of European Union leaders to discuss issues such as migration,
Brexit and trade. They are also looking for indications on the
survival prospects for the fractious new German coalition. 
    Meanwhile, spot silver        lost 0.4 percent at $15.98 an
ounce, earlier hitting its lowest since mid-December at $15.88.
    Palladium        slipped 1.4 percent to $933.97 an ounce.
    Platinum        fell 0.7 percent at $850.40 per ounce,
having touched $840.50, its lowest since late January 2016. 

 (Additional reporting by Karen Rodrigues in Bengaluru
Editing by David Evans and Frances Kerry)
  
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