Gold pressured as easing growth concerns lift equities
New York (April 16) Gold prices fell on Tuesday to hover near their lowest in over a week, as positive economic data from major economies stoked risk appetite, softening demand for safe-haven bullion.
Spot gold was down 0.3 percent at $1,284.53 per ounce, as of 1111 GMT. In the previous session, prices dropped to $1,281.96, their weakest since April 4.
U.S. gold futures shed 0.3 percent to $1,287.40.
"It's a question of risk sentiment in financial markets. Equities are up, which is putting pressure on gold, traditionally seen as a safe-haven," Julius Baer analyst Carsten Menke said.
"We've seen positive data out of China lately. That really supports the view of an improvement in the Chinese economy as well as the global economy, in turn supporting risk sentiment."
China reported better-than-expected credit and export figures last week that allayed concerns regarding the pace of economic growth. Jobs data from the United States last week also assuaged concerns that the world's largest economy was losing momentum, with the number of Americans filing applications for unemployment benefits dropping to a 49-1/2-year low. Stock markets inched higher as the reassuring Chinese economic data helped investors shrug off disappointing bank earnings in the U.S., while volatility in European markets took another leg lower. "Fast money remain ... sellers on the day while longer-term bulls are tentatively on the bid above $1,280," said Stephen Innes, head of trading and market strategy, SPI Asset Management.
"But given we are in the very early stages of a possible global growth-inspired risk revival, prices remain precariously perched above significant support level as downside momentum continues to build."
Positive news on U.S.-China trade talks as well as the absence of any large global geo-political issues have taken some sheen off bullion, analysts said.
Gold prices were trading below key technical support levels including the psychologically significant $1,300 mark, seen as negative bias, analysts and traders said.
"The yellow metal now sits firmly underneath the 100-day moving average at $1,289, with the figure now an important pivot, while the January-February lows around $1,280 - $1,283 should see supportive interest," MKS PAMP Group said in a note.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, on Monday dropped to their lowest since Nov. 9, 2018. Among other metals, silver dipped 0.3 percent to $14.95 an ounce, having hit $14.81, its lowest since Dec. 26, in the previous session.
Spot platinum gained 0.2 percent to $887.67 per ounce while palladium rose 0.1 percent to $1,362.40.
Reuters
