Tuesday 19 June 2018

Gold at new high on weak dollar

Hong Kong, November 12, 2009

Gold rose above $1,120 an ounce to a fresh record high on Thursday as the US dollar wavered near 15-month lows, while Asian shares lost ground as investors took profits after four days of gains.

Financial spreadbetters expected British and French shares to follow Asian markets lower but saw a higher opening for Germany's DAX share index US equity futures slipped 0.4 percent.

The dollar fell to a 15-month low in early trade before recouping some losses, but was still down 0.2 percent against a basket of major currencies by midafternoon.

Its weakness encouraged a further shift by investors into gold which hit a record high for a second day, rising around 0.4 percent to $1,120.30 an ounce, while platinum rose to a record high above $1,376 an ounce.

Bullion has recorded successive record highs for six out of the past eight sessions due to persistent dollar weakness, fears of a resurgence in inflation and hopes for more central bank gold buying.

Sterling also remained under pressure after the Bank of England on Wednesday explicitly called for currency weakness to boost exports and on benign UK inflation data. Sterling was trading at $1.6569, after falling more than 1 percent the previous day.

Asian shares surrendered early gains, showing some signs of fatigue as a massive rally extends into its ninth month.

The MSCI index of Asia Pacific stocks traded outside Japan was down 0.3 percent in late trade, snapping a four-day winning streak, but has still more than doubled from March lows and is near a 15-month high hit in October.

Hong Kong stocks fell 0.9 percent as profit taking set in.
Japan's Nikkei index also gave up early gains and closed 0.7 percent lower.

"The market lacked strength for further gains and consolidation is needed for the market to take a breather," said Ben Kwong, chief operating officer at KGI Asia in Hong Kong.

Analysts however, said profit taking could be limited as investors still seem to have an appetite for risk, reflected by the flight out of the weak dollar into higher-yielding assets.

A string of robust economic data from China on Wednesday has added to expectations the world's fastest-growing major economy can lead a pick-up in global activity, while a report on Thursday showed US home foreclosure filings slowed for a third straight month in October.

US President Barack Obama was due to make a statement on job creation and the economic recovery later in the day at 1425 GMT. - Reuters

Tags: Gold | Dollar | precious |


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