Gold eases to 1-week low as dollar, stocks gain
By Swati Verma BENGALURU (Reuters) - Gold eased to its lowest in nearly one week on Thursday as the dollar rose and investors latched on to gains in global stocks, while palladium touched record highs on expectations of higher demand.
By Swati Verma
BENGALURU (Reuters) - Gold eased to its lowest in nearly one week on Thursday as the dollar rose and investors latched on to gains in global stocks, while palladium touched record highs on expectations of higher demand.
Spot gold eased 0.2 percent to $1,243.27 per ounce at 11:21 a.m. EST (1621 GMT), while U.S. gold futures were down 0.2 percent at $1,247.50 per ounce.
The dollar gained against a basket of major currencies, helped by a dip in the euro after the European Central Bank reduced growth and inflation projections for next year and said the balance of risk was tilted toward the downside. [FRX/]
"It looks like ECB President Mario Draghi was a little more dovish than expected, so we are seeing the euro currency back off and the dollar strengthening, and this is weighing on gold prices," said Phil Streible, senior commodities strategist at RJO Futures in Chicago.
Also weighing on bullion was an upbeat sentiment for risk, with global stock markets receiving a boost on signs of easing U.S.-China trade tensions. [MKTS/GLOB]
"With equities rebounding this week, gold has fallen slightly out of favor as traders unwound their safe-haven bets," said Fawad Razaqzada, an analyst with Forex.com.
Markets would now be turning their attention to the Federal Open Market Committee (FOMC) meeting on Dec. 18-19, with the focus on the future path of interest rate hikes in 2019.
"If the Fed adopts a more dovish stance, we should see the dollar quickly retreat and that should give gold an opportunity to rally," Streible said.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, making it cheaper for holders of other currencies.
"Gold's recent breakout above the $1,240 resistance means the path of least resistance is still to the upside and it should get a lift if the dollar were to fall on the back of a dovish Fed," Forex.com's Razaqzada said.
Among other precious metals, spot palladium was down 0.7 percent at $1,253.24 per ounce, having touched a record high of $1,269.25 earlier in the session.
"Palladium has got a very firm upward trend with good fundamentals behind it. There is a lot of demand for palladium right now and it should continue to move up on a favorable supply and demand structure," RJO Futures' Streible said.
Silver was steady at $14.73 per ounce, having hit $14.81 earlier, its highest since Nov. 2. Platinum fell 0.6 percent to $793.60, after rising to a more than one-week peak earlier.
(Reporting by Swati Verma in Bengaluru; editing by Jonathan Oatis)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.