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Gold prices slip on dollar rebound, seen re-testing low

Reuters  |  LONDON 

By Eric Onstad

LONDON (Reuters) - Gold headed lower on Tuesday, weighed down by a stronger dollar, and may re-test a seven-month low after a failed attempt to break higher in the previous session.

Spot gold was down 0.4 percent at $1,253 an ounce by 1405 GMT, after retreating from its highest since June 26 at $1,265.87 in the previous session.

U.S. gold futures for August delivery slipped 0.5 percent to $1,253.70 an ounce.

"If this dollar strength continues, we could see another test of $1,240, the lows from last week and mid-December, a crucial technical level," said Carsten Fritsch, at in

Bullion has been in a downtrend since touching $1,365.23 on April 11, the strongest in nearly three months.

The dollar's index against a basket of six major currencies was up 0.33 percent at 94.386 after dropping to its lowest since mid-June on Monday.

A stronger dollar makes greenback-denominated gold more expensive for holders of other currencies.

Investors were also on the sidelines awaiting developments on the trade war between and the United States, said Dick Poon, general manager, Hong Kong Ltd.

Last week, the world's top two economies slapped tit-for-tat duties on $34 billion worth of each other's imports.

"Geopolitical issues, such as Britain's confused exit from the and U.S. Trump's assertion that was impeding North Korean progress on denuclearisation, have provided some support for gold," said

suggested on Monday that might be seeking to derail U.S. efforts aimed at denuclearising

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.18 percent to 800.77 tonnes on Monday, its lowest since August 2017.

"For gold to recover, we need to see the return of investors, not only speculative but ETF investors," Commerzbank's Fritsch said. "We may have to wait until the autumn until we see longer lasting increase in gold prices."

In other precious metals, silver fell 0.3 percent to $16.03 an ounce.

slipped 0.9 percent to $839 per ounce and palladium shed 1.6 percent to $944.72 an ounce.

Palladium may be forming an and shoulders pattern, Stephanie Aymes, at Societe Generale, said in a note. This pattern typically points to higher prices.

"The pattern's confirmation level stands at $1,043/47 and therefore remains a prominent hurdle," she added.

(Additional reporting by in Bengaluru; Editing by and David Evans)

(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: Tue, July 10 2018. 19:41 IST
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