- December 18, 2018
- Posted in LOCAL
Gold prices inched lower yesterday as the dollar held firm below a 19-month peak on safe-haven demand amid concerns of a global economic slowdown, and as investors awaited cues on US interest rate hikes from a Federal Reserve meeting this week.
Spot gold was unchanged at $1,238.12 per ounce at 0820 GMT. US gold futures rose 0.1 percent at $1,242.1 per ounce.
“Gold’s move today is purely dollar-driven,” said Kunal Shah, head of research, Nirmal Bang Commodities in Mumbai, India.
“Ahead of the FOMC (Federal Open Market Committee) meeting, we are going to see some downward movement . . . But the fact remains that the underlying strength in gold is likely to continue.”
“Markets will rally on the back of dollar weakness after the central bank signals a more dovish stance, but the advance will fall back quickly as global growth concerns reassert themselves,” INTL FCStone analyst Edward Meir said in a note.
Prospects of higher US interest rates are negative for dollar-priced gold as they raise the opportunity cost of holding the bullion.
The dollar index, which measures the greenback against other major currencies, was just below the 19-month high of 97,71 hit on Friday
Weaker-than-expected economic data from China and Europe and fears of a possible US government shutdown enhanced appeal for the US currency, which has played the role of a safe-haven asset in recent times.
Spot gold is biased to break a support at $1,232 per ounce, and fall to a lower support zone of $1,224-$1,228, according to Reuters technical analyst Wang Tao.
Meanwhile, hedge funds and money managers switched to net long position in Comex gold in the week ended December 11, the US Commodity Futures Trading Commission (CFTC) said on Friday.
This was the first time gold speculators held a net long position since July, and the strongest since June.
“Uncertainties of the trade war are still weighing on the market,” said Dick Poon, general manager, Heraeus Metals Hong Kong Ltd.
“It is getting close to Christmas time, so it is getting super quiet in the market. Investors reduce their inventories as much as possible before the year ends.”
Silver climbed 0,2 percent to $14,59 per ounce, while platinum declined 1 percent to $779,50 per ounce. — Reuters.