April 3, 2017 / 3:57 AM / 2 years ago

PRECIOUS-Gold prices flat on tepid U.S. economic data

    * Market eyes Trump meeting with Chinese president
    * Spot gold might touch $1,239.55 - technicals
    * Speculators raise net long positions in gold

 (Updates prices)
    By Sethuraman N R
    April 3 (Reuters) - Gold prices were little changed on
Monday after marking their best quarter in a year, supported by
uninspiring economic data from the United States and dovish
remarks from a Federal Reserve official on Friday.
    Spot gold        edged lower by 0.1 percent to $1,246.87 per
ounce at 0617 GMT, while U.S. gold futures         slipped 0.2
percent to $1,248.8.
    U.S. consumer spending barely rose in February amid delays
in the payment of income tax refunds, but the biggest annual
increase in inflation in nearly five years supported
expectations of further interest rate hikes this year.
    The Fed could pause interest rate hikes when it begins
shedding its bond holdings, a move that would have little effect
on financial markets, St. Louis Fed President James Bullard said
on Friday.             
    "The interest rate hike cycle has set in and that might keep
gold in a wide range of $1,200-$1,250 as the opportunity cost of
holding non-interest rate bearing gold is more," said Mark To,
head of research at Hong Kong's Wing Fung Financial Group. 
    "But, there are still some uncertainties in the political
climate. The two counteractive forces will determine the
consolidation within that range, which is very likely to
    Spot gold may revisit its March 31 low of $1,239.55 per
ounce, as suggested by its wave pattern and a Fibonacci
retracement analysis, said Reuters technical analyst Wang Tao.
    Spot gold notched a quarterly gain of about 8.4 percent on
Friday, marking its best quarter in a year, mostly driven by
uncertainties around U.S. President Donald Trump's policies and
elections in Europe.
    Hedge funds and money managers raised their net long
position in COMEX gold for the second straight week in the week
to March 28, and boosted it slightly in silver, U.S. Commodity
Futures Trading Commission data showed on Friday.             
    "We think that both the gold and silver complexes will make
fresh highs this month ahead of the French elections, but likely
fade in their immediate aftermath," said INTL FCStone analyst
Edward Meir.
    The main focus for markets this week is on U.S. payroll
figures on Friday and U.S. President Donald Trump's first
meeting with counterpart Xi Jinping on Thursday and Friday. 
    On Sunday, Trump held out the possibility of using trade as
a lever to secure Chinese cooperation against North Korea, which
analysts think should help gold.             
    In other precious metals, spot silver        edged down 0.1
percent to $18.20 per ounce.
    Platinum        rose 0.7 percent to $952.30, while palladium
       was up 0.5 percent to $799.25 an ounce.

 (Reporting by Nallur Sethuraman; additional reporting by Arpan
Varghese in Bengaluru; Editing by Joseph Radford and Vyas Mohan)
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