Precious metals soar as dollar slumps after U.S. data | Reuters
NEW YORK/LONDON Gold rose as much as 2 percent, silver hit a 10-month high and platinum climbed to its highest in six months on Tuesday, as the dollar weakened after U.S.
NEW YORK/LONDON Gold rose as much as 2 percent, silver hit a 10-month high and platinum climbed to its highest in six months on Tuesday, as the dollar weakened after U.S. data came in below forecasts.
U.S. housing starts fell more than expected in March and permits for future home construction hit a one-year low, suggesting some cooling in the housing market in line with signs of a sharp slowdown in economic growth in the first quarter.
Gold XAU= touched a one-week high of $1,256.80 an ounce and was up 1.8 percent at $1,252.77 by 2:50 p.m. EDT (1850 GMT), while platinum XPT= rose 4.1 percent to its highest since Oct. 23 at $1,015.70.
Silver XAG= climbed 5.2 percent to $17.07, its highest since June 2015, before stabilising with a 4.3 percent gain at $16.92.
"The severe technical damage that was done on the dollar is a big factor. I think that's the driving force today," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago.
"That has not only helped precious metals ... there's not a commodity that's not up today and that's attributed to the weakness in the dollar."
The dollar .DXY extended losses after the U.S. data, falling 0.6 percent against a basket of major currencies. The greenback has fallen to lows not seen since October last year in recent weeks.
Global equities climbed on Tuesday, but that did not dampen demand for gold, often seen as a hedge against risk. [MKTS/GLOB]
Gold traders were also watching for comments from Federal Reserve officials to gauge the outlook for U.S. monetary policy.
"Gold should probably hang on to its gains in the second quarter because the dollar is likely to stay relatively subdued with the expectations of U.S. interest rate hikes being pushed out to the second half of this year," Mitsubishi Corp analyst Jonathan Butler said.
"That generally means that the yield environment for non-interest-bearing assets remains fairly favourable."
The Fed raised rates modestly from near zero in December, its first policy tightening in nearly a decade. While futures markets imply no further increases until December, Fed projections suggest there could be two more hikes by year-end.
New York Fed President William Dudley said on Monday that U.S. economic conditions were "mostly favourable" but the Fed remained cautious on interest rates.
Boston Fed President Eric Rosengren, however, said the Fed was set to increase rates more rapidly than investors currently expected.
Top gold consumer China launched a yuan-denominated gold benchmark on Tuesday as the country took an ambitious step to exert more control over the pricing of the metal and boost its influence in the global bullion market.
Palladium gained 2.5 percent to $579 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by David Evans and Meredith Mazzilli)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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