Gold prices flat as firm dollar dents appeal

GOLD prices were flat on Monday (Jun 20) after declining in the previous session, as an elevated dollar continued to make greenback-priced bullion less attractive for overseas buyers.

Spot gold was little changed at US$1,839.79 per ounce as of 12.56 am GMT, with the dollar index hovering near its highest levels in about 2 decades. US gold futures were flat at US$1,840.30.

Asian shares were trying to sustain a rare rally, as Wall Street futures made early gains, perhaps hoping a US holiday would provide a break from recent selling, though worries about global recession were never far away.

Federal government offices, the Federal Reserve System, stock and bond markets in the US will be closed on Monday for the Juneteenth holiday.

Gold prices finished the previous week lower, falling 1 per cent on Friday, as a stronger dollar and interest rate hikes from major central banks dented the appeal of bullion, which yields no interest.

Production at US factories unexpectedly fell in May, the latest sign of cooling economic activity as the Federal Reserve aggressively tightens monetary policy to tame inflation.

European Central Bank policymaker Klaas Knot said on Friday the ECB may need to make several 50 basis point rate hikes if inflation continues to rise and that he expected about 200 basis points of hikes.

About 90 per cent of traders and analysts in a Reuters survey expected China to keep benchmark interest rates unchanged at its monthly fixing on Monday, as global central bank tightening limited room for policy manoeuvre to arrest economic slowdown.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.1 per cent to 1,075.54 tonnes on Friday from 1,063.94 tonnes on Thursday.

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Spot silver firmed 0.1 per cent to US$21.68 per ounce, platinum gained 0.2 per cent to US$934.34, and palladium rose 1.8 per cent to US$1,847.36. REUTERS