You are here

Gold steady as US dollar edges away from 14-year peak

gold.jpg
Gold was little changed on Thursday in muted trade ahead of the holidays as the US dollar slipped from 14-year highs.

[BENGALURU] Gold was little changed on Thursday in muted trade ahead of the holidays as the US dollar slipped from 14-year highs.

Spot gold was steady at US$1,131.54 an ounce by 0253 GMT. The metal, which hit a 10-1/2-month low of US$1,122.35 last week on hawkish rate hike forecast from the Federal Reserve, ended flat in the previous session.

US gold futures were little changed at US$1,132.90 per ounce.

"The market is in holiday mood already and we have very few trading days before the new year. It is all going to be quiet as the investors will be holding very thin margins," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

sentifi.com

Market voices on:

The Federal Reserve, which hiked US interest rates last week, signaled three more increases next year compared with its previous projection of two. Expectations of rate hikes lowers demand for the non-interest-paying bullion, which is priced in US dollars.

The US dollar index, which measures the greenback against a basket of currencies, slipped 0.1 per cent to 102.950. It hit 103.65 on Tuesday, its highest since December 2002.

"The US dollar is very strong and gold is going to be under pressure till Donald Trump takes over the US presidency and the focus will shift to how his polices are unfolding," said Leung.

Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, continued to fall on Wednesday, losing 0.43 per cent to hit 824.54 tonnes. Holdings are down over 12 per cent since November.

"A lot of ETF buyers got in at unsatisfactory levels. Clearly Trump's win was unexpected by the market and the rise in US yields put further pressure on gold," said Jeffrey Halley, senior market analyst at OANDA.

"A break of US$1,100 will see another round of big liquidations." Spot gold looks neutral in a range of US$1,121-US$1,137 per ounce, and an escape could indicate a direction, according to Wang Tao, Reuters analyst for commodities technicals.

Spot silver fell 0.1 per cent to US$15.92 an ounce after falling nearly one per cent in the previous session.

Platinum was down 0.3 per cent at US$912.49.

Palladium was down for the seventh straight session, down 0.2 per cent at US$656.50. The metal touched a six-week low of US$652.80 on Wednesday.

REUTERS

Powered by GET.comGetCom