Gold snaps losing run as greenback turns lower; other precious metals gain

NEW YORK/LONDON — Gold prices rose on Friday last week from one-year lows hit the previous day and spot platinum increased more than three percent after US President Donald Trump criticized the strength of the dollar and interest rate increases by the Federal Reserve, pushing the greenback sharply lower.

Spot gold gained 0.70% at $1,230.89 per ounce (/oz) by 1:40 p. m. EDT ( 1740 GMT) and US gold futures settled up $7.10, or 0.60%, at $1,231.10/oz.

Platinum gained 2.8% at $827/ oz, earlier rising 3.2% to $830.10, but on track to end the week barely changed. Its Friday performance followed gold prices, traders said.

But gold was still down by almost one percent last week, with little sign of an end to the slide in prices that has knocked 10% off the yellow metal’s value since mid-May.

The stronger dollar makes gold more expensive for buyers with other currencies. Higher interest rates tend to boost the dollar and raise the opportunity cost of holding non-yielding bullion.

Bank of America Merrill Lynch said on Friday fears of a trade war had seen global investors plough $5 billion into bonds this week while pulling $ 1.2 billion from gold.

“There’s a good chance that if you start to see any change in the stance on the dollar, rhetoric or comments from the Fed, I think you would see gold bounce back ( up) pretty hard,” said Michael Ellingston trader at US Global Investors in San Antonio.

Despite Mr. Trump’s monetary policy intervention, the dollar was still near one- year highs on Friday as Fed Chairman Jerome Powell did nothing last week to counter expectations of two more rate rises this year and said the United States was poised for several more years of growth.

Meanwhile, funds and money managers have cut their net long position in Comex gold to a twoand-a-half-year low, helping drive down prices.

And gold- backed exchange traded funds tracked by Reuters have cut their holdings by more than five percent since their 2018 peak in mid-May. Gold on Thursday touched $1,211.08 an ounce, the lowest since July last year.

On the technical front, support was at gold’s July 2017 low of $1,204.90 and Fibonacci resistance was at $1,234.70, analysts at ScotiaMocatta said, adding that technical and momentum indicators suggested prices would fall further.

Meanwhile, silver gained 1.7% at $ 15.52/oz but was still down nearly two percent last week. Palladium gained 2.7% at $893/ oz but was set for a weekly loss of almost five percent. —