Gold holds above US$1,200, but US rate hike worries weigh
[SINGAPORE] Gold steadied above US$1,200 an ounce on Monday after rising more than 1 per cent in a chart-based rebound the session before, but persistent concern that the US central bank is on course to lift rates this year should cap any gains.
Federal Reserve official Jeffrey Lacker repeated on Friday his call for the US central bank to consider hiking interest rates in June, and said there was no shame in adjusting them lower again if economic data demanded it.
Spot gold was flat at US$1,206.93 an ounce by 0212 GMT. Bullion climbed 1.1 per cent on Friday as bulls attempted to push the price past the US$1,210 resistance level.
US gold for June delivery was up 0.2 per cent at US$1,207.20 an ounce.
The timing of the first US rate hike in nearly a decade remains the "key wildcard" for gold, said Barnabas Gan, analyst at OCBC Bank. "If the Fed rate hike doesn't occur in June and if the (next) labour print doesn't come in as good as the market expects, gold could rise up to US$1,250," said Mr Gan.
US jobs grew at the slowest pace in more than a year in March, sending gold to a seven-week high of US$1,224.10 on April 6 amid speculation the Fed could delay the rate increase.
Hopes of a delay pushed hedge funds and money managers to raise their bullish bets on Comex gold futures and options for the second straight week during the week ended April 7, US Commodity Futures Trading Commission data showed on Friday.
Demand in No 2 gold consumer China remained tepid with the premium on physical gold on the Shanghai Gold Exchange at just above a dollar over the global spot benchmark on Monday from a small discount late on Friday.
The state-run Shanghai Gold Exchange said it was working on launching new price benchmark fixing products. Sources said in February that the bourse would launch a yuan-denominated gold fix this year as China, the world's top gold producer, seeks to gain more of a say over pricing.
REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Energy & Commodities
Anglo rejects BHP takeover bid as significantly undervalued
India rice prices at three-month low on shrinking demand
Gold prices set for weekly decline ahead of US inflation data
Pricey coffee is here to stay as hoarding, heat hit Vietnam supply
Oil settles higher as weak US economic growth offset by supply concerns
India's Vedanta misses Q4 profit estimates on lower prices