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Gold prices up as US dollar loses ground after Trump sacks Rex Tillerson

Trump fired Tillerson after a series of public rifts, replacing him with loyalist Central Intelligence Agency Director Mike Pompeo

Reuters  |  New York/London 


prices turned positive on Tuesday as the dollar lost ground after news that President replaced Secretary of State Rex Tillerson, while data was in line with forecasts.

Spot was up 0.3 per cent at $1,326.49 an ounce by 1:42 p.m. EDT (1742 GMT), while futures for April delivery settled up 0.5 per cent at $1,327.10.

Trump fired Tillerson after a series of public rifts over policy on North Korea, and Iran, replacing him with loyalist Central Intelligence Agency Director

"The dollar is lower and is higher off the Tillerson news. We've been seeing this pattern (of following the dollar) because there's no other strong factor leading to buying now," said Bill O'Neill, co-founder of Logic Advisors.

The dollar index relinquished its gains and fell against a basket of currencies, making commodities priced in the greenback cheaper for buyers using other currencies.

Also weighing on the dollar was news that consumer prices cooled in February, the latest indication that an expected pick-up in is likely to be only gradual.

Some investors had been worried stronger-than-expected CPI data could stoke expectations that the Federal Reserve will raise interest rates four times rather than three this year.

Higher interest rates typically make less attractive since it does not bear interest.

"Overall the outlook is not looking that great in the short term. I still expect prices to go towards $1,300, said Georgette Boele, ABN AMRO commodity strategist.

are looking to the next Fed meeting for direction on the pace of interest rate hikes this year.

"As we approach next week's FOMC day, we should see come under pressure as it struggles to compete against interest-bearing assets," said Daniel Ghali, commodities strategist at TD Securities.

Silver rose 0.6 per cent at $16.59 an ounce.

Platinum was up 0.4 per cent at $966.60 an ounce, near a one-week high of $970.90. Palladium climbed 1.7 per cent to $995.30 per ounce, after touching a one-week high of $997.40.

The platinum price will struggle to move back above palladium, ING analyst Oliver Nugent said in a note.

"Based on our own forecasts, we don't think such a move will happen for the next few years due to platinum's weaker fundamentals with the palladium backwardation actually making it more expensive for investors to short the ratio."

The platinum/palladium ratio increased from late February. Palladium flipped to a premium over platinum last September for the first time since 2001.

First Published: Wed, March 14 2018. 06:56 IST