Gold extends downward trend as the greenback remains strong

NEW YORK/LONDON — Gold prices dipped to a fresh sixmonth low on Wednesday as the US dollar strengthened, making bullion more expensive for buyers using other currencies.

Platinum also hit its lowest level since February 2016.

Gold prices have shed more than 3% this month — the biggest monthly loss since September — driven by a dollar rally, a large decline in gold held by exchangetraded funds and a sharp fall in speculative bets.

Spot gold declined 0.30% at $1,255.17 per ounce by 1:35 p.m. EDT ( 1735 GMT), after hitting its lowest since mid-December at $1,252.04. US gold futures for August delivery settled down $3.80, or 0.30%, at $1,256.10 per ounce.

Platinum lost 0.90% to trade at $ 857.40 per ounce after touching a more than one-year low at $848.50.

“The main focal point of the day will be the dollar and its pressure on gold,” said David Meger, director of metals trading at High Ridge Futures.

Technical indicators suggest gold will continue to fall, said analysts at ScotiaMocatta, with support at the psychologically important level of $1,250 then at $1,236.60, gold’s December low.

An escalating trade dispute between the US and China has hit global stock markets, but has so far not triggered demand for gold, usually seen as a safe haven to invest during times of uncertainty.

The dollar is near 2018 highs against other currencies, in part due to expectations that the US Federal Reserve will hike interest rates again after raising them in June for the second time this year.

Higher rates typically lift the dollar and US bond yields, pressuring gold, which is priced in dollars and does not offer a yield.

The head of the Dallas Federal Reserve said the US central bank could raise rates at least twice more before its monetary policy stopped being accommodative, while the chief at the Atlanta Fed said he might rule out a fourth rate hike this year if the US-China trade dispute worsens.

A fall in holdings by goldbacked exchange traded funds tracked by Reuters also pressured gold.

But gold could rebound if investment funds that have trimmed net long positions in COMEX gold to the lowest in 2-1/2 years decide prices have bottomed, according to Julius Baer analyst Carsten Menke.

Meanwhile, spot silver dropped 0.50% to $ 16.17 an ounce, while palladium declined 0.90% at $948.40. —