January 16, 2018 / 10:47 AM / 7 months ago

PRECIOUS-Gold eases from 4-month peak as dollar fights back

    * Dollar recovers some poise after hitting 3-mth low
    * Palladium slips below Monday's record high
    * GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

 (Updates throughout, adds LONDON dateline)
    By Jan Harvey
    LONDON, Jan 16 (Reuters) - Gold fell on Tuesday from the
previous day's four-month high, reflecting losses across
precious metals and commodities more widely, as the dollar
clawed back some lost ground after hitting a three-year low
against a currency basket.
    Gold's move lower snapped four straight days of gains in the
metal after the retreat of the dollar, in which it is priced,
made it cheaper for holders of other currencies. 
    Spot gold        was down 0.4 percent at $1,334.55 an ounce
at 1030 GMT, while U.S. gold futures        for February
delivery were 10 cents an ounce lower at $1,334.80.
    "Dollar weakness has calmed down, and that is one reason why
gold is retracing lower," ABN Amro analyst Georgette Boele said.
"It went up quite quickly up at the start of the year, and I
think it was a bit overstretched."
    "In general the precious metals complex and other
commodities are facing downwards today. There is a bit of
profit-taking, and also a lot of it is linked the dollar
weakness, which came to a halt."
    The dollar rose 0.2 percent against the euro, having hit a
three-year low against the single currency on Monday.       
    The U.S. currency has weakened as markets have grown
increasingly confident that a global recovery would outpace U.S.
growth and prompt other major central banks, led by the European
Central Bank, to unwind their easy money strategy faster than
has been expected. 
    Gold remained relatively firm in the face of three U.S.
interest hikes in 2017, but could suffer if these continue,
analysts say. It is highly sensitive to rising rates, which
increase the opportunity cost of holding non-yielding bullion.
    "We see a trading range of $1,225-$1,430 for gold this year,
with an average price of $1,290," INTL FCStone said in a note.
    "Our number suggests we are closer to a top (than) a bottom,
a position we are comfortable with as we are not sure gold could
withstand the higher yield environment going into next year,
especially if the (weaker) dollar eventually reverses course."
    Palladium       , which hit a record high of $1,138 an ounce
on Monday, was down 1.2 percent at $1,112.47. The metal has seen
a sustained rally as high demand in the auto industry fuelled
concerns over a persistent supply deficit, sending net long
positions in Nymex palladium futures to record highs.
    Silver        was down 1.8 percent to $17.05 an ounce, off
the previous day's three-month high of $17.42. Platinum       
was 1.4 percent lower at $982.24, after touching its strongest
since Sept. 11 at $1,001.40 on Monday.

 (Additional reporting by Nallur Sethuraman in Bengaluru;
Editing by Gareth Jones)
  
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