June 21, 2017 / 4:51 AM / a month ago

PRECIOUS-Gold edges up on falling equities, easing dollar

3 Min Read

    * Dollar index edges away from 1-month highs
    * Silver close to near six-week lows touched on Tuesday
    * Spot gold may break resistance at $1,248 an ounce -
technicals

 (Updates prices)
    By Nithin ThomasPrasad
    BENGALURU, June 21 (Reuters) - Gold inched up on Wednesday
after hitting its lowest in five weeks in the previous session,
buoyed as equities fell and the dollar eased from one-month
highs following a tumble in crude oil prices. 
    A renewed slump in oil markets to seven-month lows put Asian
investors on edge, and pushed down U.S. Treasury yields and the
dollar index against a basket of currencies.                  
    "It's mostly the dollar (supporting gold). It is a little
bit weaker than yesterday's closing," said Yuichi Ikemizu, Tokyo
branch manager at ICBC Standard Bank.  
    Spot gold        was up 0.2 percent at $1,245.82 per ounce,
as of 0801 GMT.
    U.S. gold futures         for August delivery climbed 0.3
percent to $1,246.7 per ounce
    Gold is also being supported by a bout of short-covering
following its recent weakness, said OCBC analyst Barnabas Gan.
    However, the possibility of another interest rate hike by
the U.S. Federal Reserve this year is underpinning the bearish
outlook for the yellow metal, he added.  
    Meanwhile, the outlook for inflation and the future of
financial stability are emerging as dueling concerns at the
heart of a debate at the U.S. central bank over how fast to
proceed on future interest-rate hikes.             
    Dallas Fed President Robert Kaplan on Tuesday expressed
doubt that short-term interest rates are very accommodative and
said he wants to wait for more data to understand whether recent
weak inflation readings are transitory as he suspects.
            
    Higher interest rates tend to boost the dollar and push bond
yields up, pressuring gold prices by increasing the opportunity
cost of holding non-yielding bullion.    
    Spot gold may break resistance at $1,248 per ounce and rise
towards the next resistance level at $1,251, as it has managed
to stabilize around support at $1,243, according to Reuters
technical analyst Wang Tao.
    "A lack of solid data this week globally won't be helping
gold's direction in either way," said OANDA analyst Jeffrey
Halley.
    Russia's central bank posted an increase in gold reserves in
May, the fifth consecutive month of gains.             
    Among other precious metals, silver        gained 0.1
percent to $16.47 per ounce, hovering near a six-week low hit in
the previous session.
    Platinum        slid 0.1 percent to $917.25 per ounce, while
palladium        was flat at $867.99 per ounce.  

 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by Joseph Radford and Sherry Jacob-Phillips)
  

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