Weaker greenback supports bullion prices for second day in a row

NEW YORK/LONDON — Gold prices rose on Wednesday as the dollar weakened for a second straight day following a global cyber attack and a delay to US health care legislation that fueled doubts about President Donald J. Trump’s ability to pass measures expected to boost the economy.

The dollar sank to its lowest level since November while the euro hit a one-year high after European Central Bank ( ECB) President Mario Draghi on Tuesday appeared to hint that stimulus could be trimmed this year, though sources later said he had been misinterpreted.

A weaker greenback makes dollar- denominated bullion cheaper for holders of other currencies and can increase demand.

Spot gold was up 0.20% at $1,249.20 an ounce by 2:09 p.m. EDT (1809 GMT). It was on track to close June down 1.50%, but for the second quarter finish little changed.

US gold futures settled up 0.20% at $1,249.10.

“For the remainder of this year we expect gold prices to profit slowly but surely from a weaker US dollar and to rise at a modest pace,” ABN Amro analyst Georgette Boele said.

“Our year- end forecasts for 2017 and 2018 are $ 1,300 and $1,400 per ounce, respectively.”

While the weak greenback was seen giving support to gold prices, rising yields on US benchmark 10-year Treasury notes were seen preventing stronger gains.

The risk of a deeper stock market correction meant investors now wanted to keep their gold, said Ole Hansen, head of commodities strategy at Saxo Bank.

“With the selling appetite fading, it gives some room to the upside,” Mr. Hansen said.

Stock investors were also on edge after US Federal Reserve Chair Janet Yellen said shares may be overvalued, he added.

However, bond yields rose after Mr. Draghi’s comments on ECB stimulus, limiting the appeal of non-yielding bullion.

On the technical side, gold rose above its 100-day moving average. Fibonacci resistance was at $1,255.20, analysts at ScotiaMocatta said in a note.

“Expect to see prices perking up heading into the latter part of the week, especially if the combination of a weaker dollar and US equity markets stays with us for a little while longer,” said INTL FCStone analyst Edward Meir in a note.

Among other precious metals, spot silver was up 0.90% at $ 16.81 an ounce, platinum was 0.50% higher at $921.30 and palladium was up 0.05% at $857.90.

The platinum market was heading for a third year of global surplus in 2017, consultancy CPM Group said in a report. It also said a surplus was expected in the palladium market. —