By Jan Harvey
LONDON Gold slipped further on Monday from the previous session's five-month high, as expectations that the Federal Reserve will press ahead with interest rate hikes counterweighed concerns over political tensions in North Korea and the Middle East. Spot gold was down 0.2 percent at $1,251.55 an ounce at 1415 GMT, while U.S. gold futures for June delivery were down $4.20 at $1,253.10.The metal rose above $1,270 on Friday for the first time since early November following much weaker than expected U.S. jobs data, and after the United States launched a missile strike on a Syrian air base.It fell back quickly in later trade as the dollar recovered, however, failing once again to beat key chart resistance at its 200-day moving average, which has broadly capped gains since October."There appears to have been some profit taking after that move above the 200-day moving average on Friday," Mitsubishi analyst Jonathan Butler said.
"Friday's U.S. unemployment reading, which fell to a 10-year low, would appear to confirm that the United States is approaching full employment," he said. "This has increased the probability of a June rate rise... (and) clearly weighed on gold."The dollar started the week near three-week highs against a basket of currencies after a key Federal Reserve official reinforced the U.S. central bank's commitment to continue raising interest rates. [FRX/]
Expectations that the pace of U.S. rate increases will pick up this year, lifting the opportunity cost of holding non-yielding bullion, have proved a major drag on gold. The euro also came under pressure from worries over the tightening race for the French presidency.The wider financial markets took on a more cautious tone on Monday, with trading volumes muted by political tensions in the Middle East and the Korean peninsula. [MKTS/GLOB]
Top aides to U.S. President Donald Trump differed on Sunday on where U.S. policy on Syria was headed after last week's attack on a Syrian air base, while U.S. Secretary of State Rex Tillerson warned that the strikes were a warning to other nations, including North Korea."Geopolitical tensions are likely to be supportive and may put the brakes on what would otherwise be a retracement from the mid-March uptrend," MKS said in a note. Silver was down 0.8 percent at $17.81 an ounce, having hit its highest since Feb. 27 at $18.47 on Friday. Platinum was 1.4 percent lower at $938.20, while palladium was down 1.5 percent at $789.50. (Additional reporting by Nallur Sethuraman in Bengaluru; Editing by David Goodman and Susan Thomas)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Published Date: Apr 10, 2017 22:03 PM | Updated Date: Apr 10, 2017 22:03 PM