Gold edges lower as eq­ui­ties strengthen

Kuwait Times - - BUSINESS -

Gold edged lower yes­ter­day, re­treat­ing from a near two-week high hit in the pre­vi­ous ses­sion, weighed down by a stronger dol­lar and Euro­pean eq­ui­ties. Spot gold was down 0.2 per­cent at $1,137.06 an ounce by 1117 GMT, af­ter hit­ting its strong­est since Dec. 14 at $1,148.98 on Tues­day. US gold fu­tures fell $1.50 to $1,138.20 an ounce. “In the short term, we are fo­cused to­wards sup­port at $1,100 and a break of this will be very bear­ish for the metal. As for the up­side, we re­ally need to break the level of $1,170 and $1,200,” said Naeem As­lam, chief mar­ket an­a­lyst at ThinkMar­kets.

The metal fell more than 8 per­cent in Novem­ber, as US Trea­sury yields rose af­ter Don­ald Trump’s elec­tion led to spec­u­la­tion his com­mit­ment to in­fra­struc­ture spend­ing would spur growth. It then hit a 10-month low on Dec 15 as solid US eco­nomic data gave con­fi­dence to the Fed­eral Re­serve to raise US in­ter­est rates for the first time in a year. The cen­tral bank signaled three more in­creases next year from the pre­vi­ous pro­jec­tion of two.

“Cur­rently there are very strong ex­pec­ta­tions of more rate hikes next year,” said Jiang Shu, chief an­a­lyst, Shan­dong Gold Group, adding that de­clin­ing gold prices have had a neg­a­tive im­pact on the bullish sen­ti­ment in phys­i­cal gold prices. US con­sumer con­fi­dence shot to its high­est in more than 15 years in De­cem­ber as Amer­i­cans saw more strength ahead in busi­ness con­di­tions, stock prices and the job mar­ket fol­low­ing Trump’s elec­tion as pres­i­dent in Novem­ber.

The up­beat data helped un­der­score ex­pec­ta­tions the US cen­tral bank would raise in­ter­est rates at a faster pace next year, which low­ers de­mand for non-yield­ing as­sets such as bul­lion, while boost­ing the dol­lar, in which it is priced. The dol­lar in­dex, was up 0.2 per­cent against a bas­ket of six main cur­ren­cies, as in­vestors await the re­lease of US home pend­ing sales for Novem­ber at 1500 GMT. Re­flect­ing bear­ish in­vestor sen­ti­ment, as­sets in the SPDR Gold Trust, the world’s largest gold-backed ex­change-traded fund, fell 0.14 per­cent to 823.36 tons on Tues­day. Hold­ings are down about 13 per­cent since the US pres­i­den­tial elec­tions.

In other news, Shang­hai Gold Ex­change, the world’s big­gest phys­i­cal bul­lion ex­change, said yes­ter­day it would curb the amount of gold in­vestors can trade at one time, a move an­a­lysts said would limit in­sti­tu­tional in­vestors’ in­flu­ence on prices. Sil­ver was down 0.6 per­cent at $15.83 an ounce. The metal rose nearly 1.5 per­cent on Tues­day. Plat­inum was up 0.2 per­cent at $901.40 and pal­la­dium fell 0.4 per­cent at $668.73, af­ter ris­ing over 2 per­cent in the pre­vi­ous ses­sion.

TOKYO: A man uses a mo­bile phone in front of an elec­tronic stock in­di­ca­tor of a se­cu­ri­ties firm.

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