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Gold prices near six-week low as dollar firms up, Korea fears ease

The metal slid 1 per cent last week on the back of a stronger dollar and a rise in Treasury yields to above 3 per cent

Reuters  |  London 

MMTC to auction 12 tonnes of gold from GMS in next 10 days

fell to its lowest in nearly six weeks on Monday as easing tensions on the helped boost appetite for assets seen as higher risk, such as stocks, and lifted the dollar.

The slid 1 percent last week on the back of a stronger dollar and a rise in Treasury yields to above 3 percent, which weighed on interest in non-interest bearing assets.

Its retreat has left it on track to end April down 0.5 percent, erasing all the previous month's gains.

Spot was down 0.6 percent at $1,313.91 an ounce by 1130 GMT, off an earlier low of $1,313.51, its weakest since March 13. U.S. futures for June delivery were 0.7 percent lower at $1,314.60 an ounce.

"Easing geopolitical concerns and the strengthening dollar index are the factors which are creating the sell-off," Naeem Aslam, analyst at Think Markets, said.

"We are looking at two important support levels - $1,307 followed by $1,300," he said. "A break of these levels would bring more selling pressure."

At their summit on Friday, North Korean leader and South Korean Moon Jae-in declared they would take steps to formally end the 1950-53 Korean War, which ended only with a truce, and work towards the "denuclearisation" of the

The dollar index was up 0.3 percent on Monday, holding just below its strongest since mid-January, while European shares rose after a positive session among Asian stocks overnight as tensions on the eased.

Hedge funds and money managers cut their net long position in COMEX gold contracts and switched to a net long position in silver contracts in the week to April 24, data showed on Friday.

"After nine consecutive weeks of a rare and even record net short silver position for money managers, the latest data shows that for the week ending Tuesday 24 the funds have returned to a slight net long," ING said in a note.

"Prices had briefly rallied above $17/oz but failed to hold as gold prices also fell. The gold/silver ratio has since recovered back above 80x since briefly hitting lows of 78x."

Among other precious metals, silver was down 0.8 percent at $16.36 an ounce, off an earlier three-week low of $16.34. Platinum was down 1 percent at $901.49 an ounce and palladium was 0.6 percent lower at $967.75.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, April 30 2018. 20:52 IST
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