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Gold prices tick up amid weaker dollar

Gold prices tick up amid weaker dollar

Thu May 17 2018

 

Gold prices made modest gains on Thursday after touching their lowest level this year in the previous session, amid geopolitical uncertainty and a slightly weaker U.S. dollar.

 

Spot gold had risen 0.25 percent to $1,293.43 per ounce by 0255 GMT, after marking its lowest since Dec. 27 in the previous session at $1,286.20.

 

U.S. gold futures for June delivery were 0.1-percent higher at $1,292.80 per ounce.

 

The dollar slipped versus major rivals on Thursday after it hit a 2018-peak overnight, while the euro hovered near a five-month low on concerns that political developments in Italy could cause wider disruptions in the common currency bloc.

 

“The tug-of-war between risk appetite and dollar-strength will be key in determining how gold may move. We have already seen some potential safe-haven buying... given the potential breakdown in U.S.-Pyongyang talks, despite a stronger greenback,” said OCBC analyst Barnabas Gan.

 

U.S. President Donald Trump acknowledged on Wednesday it was unclear if his summit with North Korea would go ahead after Pyongyang threatened to pull out of the unprecedented meeting.

 

Gold prices can gain during times of uncertainty as the metal is seen as a safe place to park assets.

 

Meanwhile, weighing on upward momentum for gold were surging U.S. bond yields, with the yield on the benchmark 10-year note hitting its highest level since 2011 on signs the economy was strengthening.

 

“Further gold weakness cannot be fully discounted, as the stronger U.S. Treasury yields seen could garner more dollar strength into the month ahead,” Gan said.

 

A stronger dollar makes greenback-denominated gold more expensive for holders of other currencies, while higher U.S. bond yields weigh on the appeal of non-yielding bullion.

 

In other precious metals, silver was up 0.4 percent at $16.41 an ounce, after touching the lowest in two weeks at $16.17 in the previous session.

 

Platinum was up 0.5 percent at $892.30 per ounce, after hitting a five-month low of $883.50 on Wednesday.

 

Palladium rose 0.3 percent to $986.15 per ounce.

 

Source: https://in.reuters.com/