Spot gold hits 1-week low as dollar gains dampen safe-haven trade | Reuters - Firstpost
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Spot gold hits 1-week low as dollar gains dampen safe-haven trade | Reuters

Updated: Mar 24, 2016 02:30 IST

#Argentina   #Economy   #India   #United Kingdom   #United States  

MELBOURNE Spot gold hit its lowest in a week on Wednesday, with the impact of a stronger dollar outweighing a slight swell in the metal's safe-haven appeal after attacks on an airport and a rush-hour metro train in Brussels.

Overnight news of the attacks in Belgium, and hawkish comments from another U.S. Federal Reserve official have underpinned the U.S. currency, while a rising U.S. rate path has dampened gold's investment appeal.

"Particularly in the U.S., this slow normalisation of the economy should result in a grind higher in real interest rates and cap the attractiveness of precious metals as an investment," BMI Research said in a note.

Higher interest rates increase holding costs of gold, which is a non-interest bearing asset.

Spot gold had slipped 1 percent to $1,235.36 an ounce by 0634 GMT. Prices earlier fell to the lowest since March 16 at $1,231.60 as profits were booked ahead of the Easter break which starts on Friday.

U.S. gold also fell 1 percent to $1235.80.

"The rally yesterday was partially due to the rally from the Brussels bombing, so after that, the market opened to a flurry of selling from Asia," said a trader in Singapore.

Venezuela exported about 443 million Swiss francs ($456 million) worth of gold to Switzerland in February, data showed on Tuesday, as the South American country's central bank carried out swaps to receive cash due to a biting economic crisis.

The arrest of an Iranian gold trader whom Turkish prosecutors placed at the heart of a Turkish government graft scandal two years ago hit shares in a state-run bank on Tuesday and raised opposition hopes that new light would be shed on a case it said was covered up.

Switzerland became a net importer of platinum once again in February, data from the Swiss customs bureau showed on Tuesday, as shipments from major producer South Africa ticked up.

Platinum also fell 1 percent at $981.15 while palladium dropped 1.5 percent to $594 an ounce.

(Reporting by Melanie Burton; Editing by Joseph Radford)

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

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