Monday 23 April 2018

Gold extends losses on firm dollar

London, May 21, 2013


Gold, down in seven of its last eight sessions extended earlier losses on Tuesday on a firm dollar, weak technical signals and speculation that the US Federal Reserve might rein in its stimulus programme.
Gold has been hit by a shift in investment into higher-yielding equities since the start of the year on signs of an improving global economic outlook, particularly in the US.
Spot gold fell as much as 2 percent to a session low of $1,364.90 an ounce and was trading down 1.9 percent at $1,366.96 at 1348 GMT, having been unable to sustain initial gains around the $1,400 level.
It touched its weakest since April 16 at $1,338.95 on Monday, before gaining 2.6 percent in US trade and snapping a seven-session slide that was its longest losing streak since March 2009.
US gold futures for June delivery fell 1.5 percent to $1,363.10 an ounce.
"Gold and silver fell in this big black hole yesterday ...and although we saw some buying interest overnight, fundamentals haven't changed," Saxo Bank senior manager Ole Hansen said.
"The dollar is strong, the US stock markets are holding up and bond yields are climbing, so the market is trading in defensive mode ahead of the Federal Reserve's testimony."
The dollar extended gains against a basket of major currencies, up around 0.5 percent, while US equities opened higher on uncertainty over the message that Fed Chairman Ben Bernanke will deliver when he speaks to the US Congress on Wednesday.
The market will also focus on the FOMC minutes from the central bank's April meeting.
On Monday, Federal Reserve official Charles Evans said the central bank could continue its bond buying through the summer, but end it in the autumn if the central bank became confident about its jobs outlook.
Tighter monetary policies in the United States would weigh on gold as they should strengthen the dollar, making the metal more expensive for holders of other currencies.
Holdings in SPDR Gold Trust, the largest gold-backed exchange-traded fund, continued to shrink to 1,031.50 tonnes on Monday, their lowest in more than four years.
Silver remained under pressure, but well off Monday's lows, when it slid nearly 10 percent to a 2-1/2 year trough, on heavy fund liquidation in Asian trade and generally weak fundamentals for the metal.
Spot silver was down 3.1 percent at $22.17 an ounce, but still $1.30 higher than the previous session's lows, having staged a short-lived recovery in US trade. - Reuters

Tags: Gold | precious | loss |


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