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Gold nearly unchanged as dollar holds firm

Reuters 

By Apeksha Nair

(Reuters) - Gold prices were mostly steady on Thursday amid a firm dollar, trading within sight of a two-month low hit earlier this week.

Spot gold was nearly unchanged at $1,263.21 an ounce by 0406 GMT. It marked its lowest since Oct. 6 at $1,260.71 on Tuesday.

U.S. gold futures were flat at $1,265.70.

The dollar inched up against its peers on Thursday, as optimism towards U.S. lawmakers making progress on tax legislation continued to grow.

U.S. Senate Republicans agreed to talks with the House of Representatives on the tax legislation on Wednesday, amid early signs that lawmakers could bridge their differences and agree on a final bill ahead of a self-imposed Dec. 22 deadline.

Hopes that tax reforms would boost economic growth have dented demand for safe-haven assets such as gold.

INTL FCStone analyst Edward Meir said gold could move slightly lower heading into next week's Federal Reserve meeting as investors would be jittery about the Fed's policy wording going forward.

Markets are widely anticipating an interest rate hike by the U.S. central bank next week and are waiting on the outlook for further rate hikes in 2018.

Gold is highly-sensitive to rising interest rates, as these tend to boost the dollar, in which the metal is priced.

"Gold will continue to be under pressure in view of rate hikes, dollar gains and strong U.S. data," said Argonaut Securities analyst Helen Lau.

Spot gold is poised to break support at $1,262 per ounce, and fall to the next support level at $1,250, according to technicals analyst Wang Tao.

Meanwhile, holdings in gold-backed exchange-traded funds (ETF) rose by 9.1 tonnes to 2,357 tonnes in November, with the net inflows coming entirely from Europe as the fell, the World Gold Council said on Wednesday.

In other metals, silver fell 0.1 percent to $15.95 an ounce, after hitting its lowest since mid-July in the previous session at $15.88 an ounce.

Platinum was up 0.1 percent at $902.50 an ounce, while palladium gained 0.2 percent to $995.25 an ounce.

(Reporting by Apeksha Nair in Bengaluru; Editing by Richard Pullin and Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 07 2017. 10:29 IST
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