Gold rises even as risk premium fades

Business World - - WORLD MARKETS -

NEW YORK/LON­DON — Gold prices rose on Mon­day as losses in the US dol­lar bol­stered, though gains were muted as fi­nan­cial mar­kets bet that air strikes on Syria would not es­ca­late into a wider con­flict.

Prices have trended side­ways since Jan­uary, buoyed by geopo­lit­i­cal wor­ries but capped by ex­pec­ta­tions for fur­ther US in­ter­est rate hikes and strong tech­ni­cal re­sis­tance at $ 1,360-$ 1,365 an ounce — their Jan­uary, Fe­bru­ary and April highs.

Spot gold was up 0.10% at $1,346.31 per ounce by 2:49 p.m. EST, up 0.10%, as US gold fu­tures for June de­liv­ery set­tled up 0.21% at $1,350.70 per ounce.

Forces from the United States, Britain and France tar­geted Syria with air strikes on Satur­day, hit­ting what they said were three of its main chem­i­cal weapons fa­cil­i­ties.

Gold prices reached a high of $1,350.52 on the back of the news, but strug­gled to main­tain those gains amid ex­pec­ta­tions the at­tacks would not mark the start of greater West­ern in­volve­ment in the con­flict.

“Some of the risk ( premium) has come down fol­low­ing the air strikes,” Cap­i­tal Eco­nom­ics an­a­lyst Si­mona Gam­barini said.

“Some mar­ket par­tic­i­pants were think­ing that maybe there could be an es­ca­la­tion of the tensions, but that has not hap­pened and there­fore prices have come down a bit.”

Bul­lion found sup­port as the dol­lar sank against the euro.

“Syria, China trade tensions, and the dol­lar in­dex fall­ing off are all good rea­sons for gold prices to con­tinue to rise,” said se­nior mar­ket strate­gist at RJO Fu­tures in Chicago.

“It’s dis­ap­point­ing there wasn’t more of a rally, but traders are turn­ing to eq­ui­ties at these lev­els.”

Spec­u­la­tors raised their net long po­si­tions in COMEX gold con­tracts by 363 con­tracts to 138,212 con­tracts in the week to April 10, US Com­mod­ity Fu­tures Trad­ing Com­mis­sion data showed on Fri­day.

Sil­ver was up 0.39% at $16.683 per ounce.

Pal­la­dium rose 1.54% at $ 1,002.22 an ounce, off highs of $1,012.10, the strong­est since March 1. Plat­inum was 0.15% higher at $928.90. “Pal­la­dium is shoot­ing up be­cause of Rus­sian sanc­tions,” said Ge­orge Gero, man­ag­ing di­rec­tor of RBC Wealth Man­age­ment.

Prices rose 9.6% last week, their big­gest weekly gain in more than a year, as con­cerns that sup­ply from num­ber one pro­ducer Rus­sia could be dis­rupted by US sanc­tions fed into a strong tech­ni­cal re­bound fol­low­ing the metal’s 20% fall from its Jan­uary record high. The gy­ra­tions shot pal­la­dium’s premium above plat­inum above $76 an ounce, the strong­est since Jan­uary.

Plat­inum has his­tor­i­cally been the higher-priced metal, but sup­ply con­cerns have driven pal­la­dium to a rare premium in re­cent months. —

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