April 6, 2017 / 3:29 AM / 4 months ago

PRECIOUS-Gold firm as dollar, equities fall ahead of Trump-Xi meeting

3 Min Read

    * Investors cautious ahead of Trump-Xi meeting
    * Spot gold may rise to $1,265/oz - technicals
    * Palladium holds near March 2015 highs hit in prior session

 (Updates prices)
    By Sethuraman N R
    April 6 (Reuters) - Gold prices held firm on Thursday on the
back of a weaker dollar and as appetite for risky assets such as
equities waned ahead of a potentially tense meeting between U.S.
President Donald Trump and his Chinese counterpart. 
    Spot gold        inched down 0.1 percent to $1,253.75 per
ounce by 0700 GMT. U.S. gold futures         were up 0.6 percent
at $1,255.60, after climbing as much as 1 percent to $1,260.80
earlier in the day.
    Investors were cautious ahead of the meeting between Trump
and Chinese President Xi Jinping due later on Thursday, the
first between the world's two most powerful leaders.
    Topping the agenda at Trump's Mar-a-Lago resort in Florida
will be whether he makes good on his threat to use U.S.-China
trade ties to pressure Beijing to do more to rein in its
nuclear-armed neighbour North Korea.             
    Spot gold hit $1,261.15 on Tuesday, its highest since Feb.
27, but has failed to breach a key 200-day moving average of
$1,258.
    "It just hasn't shown any ability to break the 200-day
moving average and clearly shows that the price action is not
being driven in isolation but has been driven by the U.S.
dollar," said Jeffrey Halley, senior market analyst at OANDA.
    "It is kind of looking like gold is running out of steam in
the short term." 
    Lingering fears of a possible trade war kept Asian markets
on edge.            
    The dollar index       , which measures the greenback
against a basket of currencies, fell 0.1 percent to 100.460.
       
    U.S. Federal Reserve's March minutes on Wednesday showed
most policymakers think the central bank should take steps to
begin trimming its $4.5 trillion balance sheet later this year
as long as the economic data holds up.             
    Falling equities, driven by the Fed's hawkish tone, have
supported gold and should prices decisively move above the
200-day moving average, more quantitative money could start
coming in, said INTL FCStone analyst Edward Meir.
    "A plethora of troubling geopolitical events, along with the
upcoming French elections, still percolate in the background and
have the capacity to provide an element of support to gold, at
least over the short term."
    Spot gold may rise to $1,265 per ounce, as suggested by its
wave pattern and a Fibonacci retracement analysis, Reuters
technical analyst Wang Tao said.             
    Spot silver        dropped 0.4 percent to $18.19 an ounce.
    Platinum        fell 0.7 percent to $953, while palladium
       rose 0.5 percent to $808.60. It hit a more than two-year
high of $815.70 in the prior session.

 (Reporting By Nallur Sethuraman in Bengaluru; Editing by Biju
Dwarakanath and Richard Pullin)
  

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