Gold edges down on as the dollar steadies
by Clara Denina,
2016-03-18 16:15:59.0
LONDON — Gold edged down on Friday, as the dollar steadied above a five-month low, but the metal remained on track for a weekly gain after the Federal Reserve (Fed) scaled down rate hike expectations.
Spot gold was down 0.4% at $1,252.26 an ounce by 12.59pm GMT, while US gold fell 1% to $1,253 an ounce. Spot gold was up around 0.3% on the week.
"There has been a bit of selling into the rally in the past couple of days but on whole gold has managed to hang on to its gains," Mitsubishi Corp analyst Jonathan Butler said.
"With the dovish overall macro outlook — the Fed’s more dovish stance and European Central Bank (ECB) and Bank of Japan also pursuing very aggressive stimulus policies — affecting the strength of the dollar and US Treasury yields, gold should benefit." The dollar rose 0.2% against a basket of main currencies, but was still near a 17-month low against the yen and set to end the week 1.5% lower.
The US central bank held interest rates steady on Wednesday and indicated it would tighten policy this year, but fresh projections showed policymakers expect two quarter-point increases by year-end, half the number forecast in December.
Expectations the Fed would raise rates steadily this year had faded since the bank’s initial hike in December, as concerns over global growth roiled financial markets.
A low interest rate environment tends to decrease the opportunity cost of holding non-yielding bullion.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.50% to 807.09 tonnes on Thursday from 795.20 tonnes on Wednesday.
Silver rose more than 1% to its highest since late October at $16.13. It was up 4% this week.
Platinum fell 0.9% to $972.75 and palladium gained 0.2% to $590.50.
Reuters
Picture: AFP PHOTO/OZAN KOSE
LONDON — Gold edged down on Friday, as the dollar steadied above a five-month low, but the metal remained on track for a weekly gain after the Federal Reserve (Fed) scaled down rate hike expectations.
Spot gold was down 0.4% at $1,252.26 an ounce by 12.59pm GMT, while US gold fell 1% to $1,253 an ounce. Spot gold was up around 0.3% on the week.
"There has been a bit of selling into the rally in the past couple of days but on whole gold has managed to hang on to its gains," Mitsubishi Corp analyst Jonathan Butler said.
"With the dovish overall macro outlook — the Fed’s more dovish stance and European Central Bank (ECB) and Bank of Japan also pursuing very aggressive stimulus policies — affecting the strength of the dollar and US Treasury yields, gold should benefit." The dollar rose 0.2% against a basket of main currencies, but was still near a 17-month low against the yen and set to end the week 1.5% lower.
The US central bank held interest rates steady on Wednesday and indicated it would tighten policy this year, but fresh projections showed policymakers expect two quarter-point increases by year-end, half the number forecast in December.
Expectations the Fed would raise rates steadily this year had faded since the bank’s initial hike in December, as concerns over global growth roiled financial markets.
A low interest rate environment tends to decrease the opportunity cost of holding non-yielding bullion.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.50% to 807.09 tonnes on Thursday from 795.20 tonnes on Wednesday.
Silver rose more than 1% to its highest since late October at $16.13. It was up 4% this week.
Platinum fell 0.9% to $972.75 and palladium gained 0.2% to $590.50.
Reuters
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