June 19, 2018 / 11:05 AM / a month ago

PRECIOUS-Gold down, platinum plunges to lowest since 2016 on stronger dollar

    * Risk aversion sends global shares to lowest since December
    * Platinum hits more than 2 year low
    * GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

 (Recasts; updates prices, headline; adds comment, second
byline, NEW YORK to dateline)
    By Renita D. Young and Zandi Shabalala
    NEW YORK/LONDON, June 19 (Reuters) - Gold fell to a near
six-month low and platinum hit its lowest since February 2016 on
Wednesday as a stronger greenback was overwhelmed by safe-haven
buying, spurred by fears of a trade war between the world's two
top economies.
    The U.S. dollar index        touched its highest since July
2017 against a basket of currencies, as U.S. President Donald
Trump threatened to impose a 10 percent tariff on $200 billion
of Chinese goods and Beijing said it would retaliate.
            
    The trade spat reinforced concerns about global growth and
triggered a selloff in equities, while boosting safe-haven
currencies such as the yen and the dollar.                   
    Typically, gold is used by investors as a place to park
assets during times of global uncertainty.
    But the dollar's inverse relationship with bullion - a
stronger greenback makes dollar-denominated assets more
expensive for holders of other currencies - can often override
other factors.
    "In these environments, the Treasuries and dollars would
tend to be safe havens," said TD Securities' Bart Melek. "Gold
would tend to be as well, though you had a big jump in the
dollar, so that pressures gold."
    Spot gold        fell 0.1 percent at $1,276.19 per ounce by
1:43 p.m. EDT (1743 GMT), having touched its lowest since Dec.
22 at $1,270.
    U.S. gold futures         for August delivery settled down
$1.50, or 0.1 percent, at $1,278.60 per ounce.
    Platinum        fell 1.6 percent at $867 an ounce, earlier
touching its lowest since February 3, 2016 at $856.85.
    "Platinum is coming off with gold (and stocks)," said
Patrick Magilligan, director of metals marketing for Key Metal
Refining.
    The rising prospect of further U.S. Federal Reserve interest
rate increases placed further pressure on gold. U.S.
homebuilding surged to near an 11-year high in May.             
    Rate hikes would limit gold because they make non
interest-bearing commodities less attractive to investors.
    Other market watchers said gold prices fell to technical
selling.
    "Momentum selling accelerated through the lows as weak
technicals (for now) outweighs a supporting macro environment
(stocks, yields down, Japanese yen up)," said Saxo Bank analyst
Ole Hansen.
    Gold prices broke below the May low at $1,281.76 per ounce,
then the lows from the last couple of days, and continued
selling off, Key Metal Refining's Magilligan added.
    Meanwhile, silver        dropped 0.5 percent at $16.32 an
ounce, after hitting its lowest since May 16 at $16.21.
    Palladium        lost 2.3 percent at $967.25 an ounce, after
marking its lowest since May 21 at $964.20.

 (Reporting by Renita Young in New York and Zandi Shabalala in
London, Additional reporting by Karen Rodrigues and Apeksha Nair
in Bengaluru
Editing by John Stonestreet and Rosalba O'Brien)
  
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