April 24, 2018 / 4:26 AM / 6 months ago

PRECIOUS-Gold edges up, but safe-haven demand starts to fade

    * Gold may bounce to $1,334/oz before falling - technicals
    * Dollar index rises to over 3-month peak
    * U.S. 10-year Treasury yield highest in over 4-years

 (Adds comments, updates prices)
    By Swati Verma
    BENGALURU, April 24 (Reuters) - Gold prices edged up on
Tuesday, but stayed near two-week lows as a stronger dollar,
rising U.S. Treasury yields and receding geopolitical worries
crimped safe-haven demand for the metal.
    After falling for three previous sessions, spot gold       
edged up 0.2 percent to $1,327.20 per ounce by 0632 GMT. That
was not far from a low of $1,321.81 touched on Monday, its
weakest since April 6. U.S. gold futures         rose 0.4
percent to $1,329.20 per ounce.
    "Today in Asia, gold is higher following some choppy trading
this morning ... and we are seeing some buying out of China,"
MKS PAMP Group trader Tim Brown said.
    Spot gold may bounce to $1,334 per ounce before falling
again, as suggested by a rising channel and a retracement
analysis, according to Reuters technical analyst Wang Tao.
        
    "Gold is going up and down with views on risk-aversion ...
less risk-aversion is pushing it down. We feel that there could
be more downward pressure on gold in the near-term," said John
Sharma, an economist with National Australia Bank.
    "(A strong) dollar makes gold expensive for non-U.S. buyers
and rising yields increase the opportunity cost of holding gold,
which is another factor lessening gold's appeal."
    The dollar rose to more than three-month highs against a
basket of currencies as the U.S. 10-year Treasury yield climbed
towards the psychologically key 3 percent level. The U.S.
10-year Treasury yield hit its highest in over four years on
Monday.             
    Gold prices also came under downward pressure from an
improvement in the geopolitical environment, with the U.S.
Treasury Secretary cautiously optimistic on his negotiations
with China, North Korea freezing its nuclear testing, and
Washington extending its deadline for sanctions against Russia's
Rusal          , said OCBC analyst Barnabas Gan.             
            
    Palladium plunged 5 percent on Monday after the United
States gave American customers of Russia's biggest aluminium
producer, Rusal, more time to comply with sanctions.
            
    Rusal owns a 28-percent stake in Norilsk Nickel          ,
the world's biggest palladium producer. 
    Spot palladium        was up 0.7 percent on Tuesday at
$985.35 an ounce. Platinum        was 0.1-percent higher at $918
an ounce.
    Silver        rose over 1 percent to $16.71 an ounce, having
fallen over 3 percent in the previous session.

 (Reporting by Swati Verma in Bengaluru; Editing by Joseph
Radford and Vyas Mohan)
  
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