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Gold slides to 1-week low as dollar climbs

Reuters  |  LONDON 

By Desai

LONDON (Reuters) - Gold prices slid on Friday to their lowest in more than a week as the dollar rose due to easing trade tensions and weak demand for the due to expectations of higher interest rates in the

Spot gold was down 0.5 percent at $1,240.3 an ounce, at 1031 GMT from an earlier $1,238.90, its lowest since July 3. It has fallen about 9 percent since the middle of April. U.S. gold futures slipped 0.5 percent to $1,240.9 an ounce.

Tensions between the and eased after said on Thursday talks between the world's two largest economies could be reopened if is willing to make significant changes.

A rising U.S.-currency makes dollar-denominated gold more expensive for holders of other currencies, which potentially weighs on demand.

"When the dollar rises we see gold falling, but when the dollar falls we don't see gold recovering because there is very little appetite for gold at this time," said "Higher interest rates in the U.S. means holding gold costs money."

Gold does not earn any interest or dividends and costs money to store and insure.

The Federal Reserve last month raised its benchmark overnight lending rate 25 basis points to 1.75-2.0 percent. Expectations are for another two rate rises this year and three in 2019.

Investors retreating from gold can be seen in the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust GLD, which has seen its holdings fall more than 8 percent since late April to below 26 million ounces.

On the technical front, any attempts on the upside will meet resistance at the 21-day moving average currently around $1,258, while support is at $1,237.32 the low on July 3 followed by the December trough at $1,352.92.

Silver fell 0.6 percent to $15.80 an ounce, platinum lost 1.1 percent to $829.64 an ounce and palladium was 0.9 percent lower at $940.9.

"The global trade dispute is threatening to disrupt auto sales, placing a question mark over platinum and palladium demand," ANZ analysts said in a note.

"While auto sales numbers suggest steady demand growth for palladium, expect a moderate decline in auto catalyst demand for platinum this year."

More platinum than palladium is used in diesel engines, whose sales have fallen since was found in 2015 to have cheated in emissions tests.

(Additional reporting by in Bengaluru; Editing by Robin Pomeroy)

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

First Published: Fri, July 13 2018. 16:21 IST