Business Standard

Gold rebounds on profit-taking, dollar, but seen vulnerable


Reuters LONDON
By Eric Onstad
LONDON (Reuters) - Gold prices recovered on Friday from six-month lows as speculators took profits amid a weaker dollar, but some analysts warned that more losses were likely.
Spot gold added 0.2 percent to $1,250.77 an ounce by 1230 GMT. On Thursday, it touched $1,245.32, its lowest since Dec. 13, 2017.
U.S. gold futures edged up 0.1 percent at $1,252.10 an ounce.
"We're receiving only a couple of dollars bounce on the back of a pretty decent weakening of the dollar, so gold's not showing any signs of strength," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"The shorts are still in control and the momentum is negative. The dollar and U.S. treasuries have taken over the role of safe haven this month and as long as the trade war is creating uncertainty then that will probably prevail."
Gold was on track for a third straight weekly decline, having slipped 1.4 percent so far this week. Spot gold was down about 3.6 percent for the month, heading for its biggest monthly drop since November 2016.
Hansen said the downtrend would likely accelerate unless gold held above multiple layers of support slightly below $1,240. "If that area breaks, the shorts and momentum sellers will have a field day."
The euro jumped more than a half cent after European Union leaders reached an agreement on migration.
A stronger euro potentially boosts demand for gold by making dollar-priced bullion cheaper for European investors.
The dollar index against a basket of six major currencies slipped 0.6 percent, having risen to about a one-year high on Thursday.
Gold demand improved this week in India as prices fell to their lowest level in nearly three months, while demand elsewhere in Asia remained tepid as investors waited for prices to fall further.
In other precious metals, spot silver gained 0.3 percent to $16.01 an ounce. It was heading for its biggest weekly decline since the week ended April 27, down 2 percent for the week.
Palladium dipped 0.1 percent to $943.60 an ounce.
Platinum fell 0.2 percent at $845.96 per ounce. It hit its lowest since January 2016 at $837.30 earlier in the session. It was down 9 percent for the quarter, its worst since the quarter ended December 2016.
(Additional reporting by Karen Rodrigues in Bengaluru; editing by Louise Heavens and Jason Neely)

(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.)

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First Published: Jun 29 2018 | 6:13 PM IST

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