Gold hovers near 2-month low as dollar stays elevated

GOLD prices weakened on Thursday (Apr 28) towards a 2-month trough hit in the previous session, as the US dollar steadied near 5-year highs, hurting demand for greenback-priced bullion.

Spot gold was down 0.1 per cent at US$1,885.20 per ounce, as of 12.38 am GMT. US gold futures were also down 0.1 per cent at US$1,886.40.

The dollar was nearing highs not seen in 2 decades on Thursday as the energy crisis in Europe hamstrung the euro, while the yen was undercut by expectations the Bank of Japan would stick to its super-easy policies.

Measured against a basket of currencies, the dollar index had reached a 5-year top of 103.28 and a further push above 103.82 would see it to levels not visited since late-2002.

A stronger dollar makes greenback-priced gold less attractive for other currency holders.

The march higher in the dollar pushed gold prices to their lowest since Feb 24 on Wednesday.

Bullion is seen as a safe store of value during economic and political crises, a factor that seemed to limit losses on Thursday.

Europe should stop depending on Russia for trade after Moscow halted gas supplies to Bulgaria and Poland for not paying in roubles, Ukraine said, as the shutoff exposed the continent's weaknesses and divisions on Wednesday.

Global demand for gold surged 34 per cent year-on-year in the first quarter to the highest in over 3 years, driven by investors worried about Russia's invasion of Ukraine and rising inflation, the World Gold Council (WGC) said.

Spot silver gained 0.1 per cent to US$23.31 per ounce, platinum was flat at US$917.77, and palladium firmed 0.3 per cent to US$2,209.71. REUTERS