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Gold prices ease as dollar hovers near 2018 peak

Reuters  |  BENGALURU 

By Apeksha Nair

BENGALURU (Reuters) - Gold prices early gains on Thursday and edged closer to a five-month low, hit in the previous session, as the dollar pared losses against major rivals and traded within sight of its 2018-peak.

Spot gold fell 0.1 percent to $1,288.65 per ounce by 0723 GMT, after marking its lowest since Dec. 27 on Wednesday at $1,286.20.

U.S. gold futures for June delivery were nearly 0.3 percent lower at $1,288 per ounce.

The dollar index trimmed losses and traded within sight of its 2018-peak hit overnight, while the euro hovered near a five-month low on concerns that political developments in could cause wider disruptions in the common currency bloc.

Also weighing on gold were surging U.S. bond yields, with the yield on the benchmark 10-year note hitting its highest level since 2011 on signs the economy was strengthening.

"Further gold weakness cannot be fully discounted, as the stronger yields seen could garner more dollar strength into the month ahead," said.

A stronger dollar makes greenback-denominated gold more expensive for holders of other currencies, while higher U.S. bond yields weigh on the appeal of non-yielding bullion.

Meanwhile, political uncertainty arising out of after threatened to pull out of a meeting with the was likely limiting downside for gold, investors said.

"The tug-of-war between risk appetite and dollar-strength will be key in determining how gold may move. We have already seen some potential safe-haven buying ... given the potential breakdown in U.S.-talks, despite a stronger greenback," Gan said.

Gold prices can gain during times of uncertainty as the is seen as a safe place to park assets.

In other precious metals, silver was unchanged at $16.35 an ounce, having touched the lowest in two weeks at $16.17 in the previous session.

Platinum was up 0.1 percent at $888.30 per ounce, after earlier hitting its lowest in five months at $883.

Palladium fell 0.2 percent to $981.20 per ounce.

(Reporting by in Bengaluru; Editing by and Subhranshu Sahu)

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

First Published: Thu, May 17 2018. 13:03 IST