Gold price retreats as global equities hit record high
New York (Apr 24) Gold dipped on Friday and looked set for a third successive weekly loss as strength in global equities, which offset a falling dollar, and uncertainty over the timing of a US rate rise pegged prices in a narrow range.
World stocks hit record highs on Friday as positive corporate updates in Europe and a post-dotcom-boom peak for the US Nasdaq stoked investor optimism.
Spot gold was down 0.3% at $1,190.55 an ounce at 9.40am GMT, while US gold futures for June delivery were down $4.30/oz at $1,190.
Spot prices are down nearly 1% this week, their biggest weekly loss in seven weeks.
"The news this week in general has been gold-friendly — weaker dollar, weaker US data and Middle East tensions," Saxo Bank analyst Ole Hansen said.
"But it has failed to ignite, leaving the metal rangebound for now. The stock market remains well behaved, and while that continues, the demand is just not strong enough."
Strength in stocks balanced a drop in the dollar, with the euro hitting two-week highs against the US unit after upbeat German business sentiment data and as fears for a Greek default eased.
Weak data on US jobless claims, manufacturing and home sales have hurt the dollar this week, but boosted uncertainty over whether the US Federal Reserve will conduct its first US rate rise in nearly a decade in June or September.
Attention is turning to the Fed’s policy meeting next week for stronger clues on when the US central bank will start increasing rates. That would raise the opportunity cost of holding non-yielding bullion, while boosting the dollar.
"Should the (Fed) ... prove hawkish, we may expect gold to fall swiftly and embark on a new downtrend to $1,145," said Howie Lee, an analyst at Phillip Futures.
Traders were also eyeing the Asian physical markets for signs of increased demand that would support global prices.
In China, the second-biggest consumer, premiums fell to about $1/oz over the spot from about $2 in the previous day, while in top consumer India, demand is set to taper out after strong sales during Tuesday’s Akshaya Tritiya festival.
Silver was down 0.5% at $15.79/oz, while platinum was down 0.1% at $1,131/oz and palladium was up 0.4% at $770.45/oz.
Source: bdLive.za
