Friday 22 June 2018

Gold rates near two-month low

Singapore, August 25, 2014

Gold edged down on Monday, hovering near its lowest in two months on a firmer US dollar and speculation of an eventual increase in US interest rates that could hurt the metal's appeal as a hedge against inflation.

After falling nearly two per cent last week, bullion attracted buying from jewellers in Asia, but the amount was limited and investors stayed on the sidelines. Despite the recent reversals, bullion is still up more than six per cent this year.

Gold had slipped 0.19 per cent to $1,278.34 an ounce by 0333 GMT, not far from a two-month low of $1,273.06 hit last week.

Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong, said: "Sentiment wise, I would call it negative. Every time it can't hold above $1,300, there's some disappointment."

At a gathering of central bankers in Jackson Hole, Federal Reserve chair Janet Yellen nodded to the concerns of some Fed officials about the sustained level of monetary policy stimulus, even as she stressed the need to move cautiously on raising rate.

"Yellen was talking about a chance for interest rates to rise early. All these factors seem to be negative for gold for the time being. The only positive thing is that we saw some kind of demand at this level," Leung said.

The Federal Reserve has said it would wait a "considerable time" after winding down a stimulative bond-buying program in October before raising rates. Financial markets currently expect a rate hike around the middle of next year.

Premiums for gold bars in Hong Kong stood at 70 cents to $1.10 to the spot London prices, higher than 50 to $1.00 quoted late last week because of purchases from jewellers.

US gold was at $1,279.20 an ounce, down $1.00. Trading had stopped earlier because of a technical glitch.

In other markets, the dollar marched higher against the euro and yen as investors wagered that interest rates were set on a diverging course in the US, Europe and Japan, giving a lift to Tokyo stocks in the process.

China's planned global gold exchange has signed up more members than targeted, as foreign banks and trading houses seek direct access to the world's top physical gold consumer and to test out reforms allowing them to trade commodities in the Yuan currency. - Reuters

Tags: Gold | Singapore |

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