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Gold slips to three-week low as dollar holds firm

Spot gold was 0.3 per cent lower at $1,313.81 an ounce at 0744 GMT, after touching $1,312.26, the lowest since February 9

Reuters 

Gold

prices fell to a three-week low on Thursday, weighed down by a stronger dollar, while awaited the second session of Jerome Powell's testimony before the Senate Banking Committee later in the global day.

Spot was 0.3 per cent lower at $1,313.81 an ounce at 0744 GMT, after touching $1,312.26, the lowest since February 9. Prices have fallen over 1 per cent so far this week.

US futures were down 0.2 per cent at $1,314.7 per ounce.

The index, which measures the greenback against a basket of major currencies, was steady at 90.617. It had earlier touched its highest since January 19 at 90.744.

"US firmness continues to weigh on but (the metal) found some support on weakness in equities," said a Hong Kong-based trader.

The US currency, which in February recorded its best monthly performance since November 2016, has been bolstered by Powell's hawkish stance on the US economy that fuelled expectations of interest rates being raised four times this year rather than three.

Higher interest rates tend to boost the and push bond yields up, making greenback denominated, non-yielding more expensive for holders of other currencies.

The market is keenly waiting for the second round of Powell's testimony.

"There's the chance he dials back his hawkish rhetoric, but if he stays the course, there's always a chance we could see higher repricing of US interest rates and a slightly firmer which could trigger another leg lower in prices," Stephen Innes, APAC trading head at OANDA, said in a note.

slowed slightly more than initially thought in the fourth quarter after the strongest pace of consumer spending in three years depleted inventories and drew in imports as businesses struggled to produce enough goods and services.

Meanwhile, Asian stocks fell on Thursday after the Fed chief's comments revived fears about the pace of US monetary tightening this year, amid concerns that higher borrowing rates could crimp corporate activity and cool economic growth.

Spot continues to target $1,303 as it has more or less broken a support at $1,317 per ounce, according to Reuters technical analyst Wang Tao.

The key psychological level of $1,300 could bring in the next round of buying, said another trader in Hong Kong.

"needs a good day up for people to feel confident to buy it. We're making it lower and lower everyday," said the trader.

Among other precious metals, silver shed 0.3 per cent to $16.35 an ounce.

fell 0.6 per cent to $977.20 per ounce, while palladium was flat at $1,042.50 per ounce.

First Published: Thu, March 01 2018. 17:54 IST
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