Gold climbs to near three-week high as dollar slides | Reuters
By Jan Harvey | LONDON LONDON Gold rallied on Tuesday as a strong performance from centrist presidential candidate Emmanuel Macron in a French election debate and fading expectations for near term U.S.
By Jan Harvey
LONDON Gold rallied on Tuesday as a strong performance from centrist presidential candidate Emmanuel Macron in a French election debate and fading expectations for near term U.S. interest rate hikes pushed the dollar to a six-week low versus the euro. Weakness in the U.S. currency helped pull the metal off early lows hit after a sharp drop in Asian trading hours, as a failure to overcome chart resistance prompted speculative selling following a four-day rally.Spot gold was at $1,242.11 an ounce at 1537 GMT, up 0.8 percent, after earlier touching its highest since March 2 at $1,242.81 an ounce. U.S. gold futures for April delivery were up $8.80 at $1,242.80."We're back down below 100 on the dollar index, and that is tied in with the less aggressive rate hike expectations that we heard last week from the Fed," Mistubishi analyst Jonathan Butler said. "The fact that we're now at a six-week low in the dollar is obviously feeding into some of the strength in gold."
The metal rallied in the wake of last Wednesday's less hawkish than expected Federal Reserve policy statement, which dampened speculation that the U.S. central bank would raise interest rates quickly this year.Gold is highly sensitive to rising U.S. rates, as these increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced. It fell in the run-up to the Fed's rate hike last week, before rebounding.
Prices were also underpinned by uncertainty over U.S. President Donald Trump's policy direction and concerns over the impact of populist parties on European elections this year, analysts said. "The previous two hikes marked cycle lows for gold, and European election uncertainty, U.S. President Trump's foreign policies, as well as seasonal demand in India materialising in April are likely to make Q2 the strongest quarter for gold prices this year," Standard Chartered said in a note.Holdings of the largest gold-backed exchange traded fund, New York-listed SPDR Gold Shares, fell another 3.8 tonnes on Monday, a third day of decline.
Meanwhile data from the Swiss customs bureau showed Hong Kong's net gold exports to Switzerland hit their highest in February since records began five years ago.Silver was up 0.6 percent meanwhile at $17.51, while platinum was 0.2 percent higher at $969.20. Palladium, outperforming other precious metals, was up 1 percent at $787, having earlier touched its highest in more than a month at $792.90 an ounce. (Additional reporting by Nallur Sethuraman in Bengaluru; Editing by Dale Hudson/Ruth Pitchford)
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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.