Gold down as robust U.S. data lifts dollar, equities | Reuters - Firstpost
You are here:

Gold down as robust U.S. data lifts dollar, equities | Reuters

Updated: Mar 3, 2016 00:15 IST

#article   #markets   #opinion   #science   #Technology  

LONDON Gold dropped for a second session on Wednesday as the dollar rose and global shares strengthened after strong U.S. data rekindled speculation the Federal Reserve could still raise interest rates this year.

Spot gold slipped 0.1 percent to $1,229.06 an ounce by 1049 GMT, while U.S. gold futures for April delivery were unchanged at $1,230.80 an ounce.

"We have seen oil markets stabilise, stocks move higher and the dollar making a bit of headway over the past week and then adding to that, we are looking at whether to readjust the expectation for U.S. rate hikes," Saxo Bank senior manager Ole Hansen said.

"But the reaction in gold is really benign. We are still in the phase of investors filling their boots and that means the retracement we are seeing in gold is likely to be used as a buying opportunity."

Bullion has rallied about 15 percent this year, rediscovering its role as a shelter for risk-averse investors in the face of tumbling equities and fears of a global economic slowdown.

On Wednesday, gold fell along with other assets perceived as safer, including the Japanese yen, as a rally in stock markets stoked risk appetite.

Data showed U.S. manufacturing stabilised in February. A separate report on construction spending showed activity scaled a more than eight-year high in January.

The dollar was up 0.1 percent against a basket of currencies, after hitting a one-month high against the euro on Tuesday.

Investors will be watching more U.S. data to gauge the impact on stocks and the Fed's monetary policy, with the most important release being non-farm payrolls on Friday.

While gold faces firm resistance at $1,250-$1,260, "the market has built a solid and supportive base above $1,200" and there is enough risk sentiment and uncertainty to support the metal, HSBC said in a note.

"We are raising the top end of our trading range to $1,300 from $1,275 previously and believe the rally remains essentially intact."

Flows into bullion-backed exchange-traded funds (ETFs) continued to increase. Assets in SPDR Gold Trust, the world's top gold ETF, rose 1.15 percent on Tuesday to 786.20 tonnes, the highest since September 2014.

Among other precious metals, platinum fell 0.3 percent to $935.77 an ounce, while silver lost 0.2 percent to $14.81 and palladium climbed 0.4 percent to $516.75.

(Additional reporting by A.Ananthalakshmi in Singapore; Editing by Dale Hudson)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Comment using Disqus

Show Comments