June 26, 2018 / 10:44 AM / in 6 months

PRECIOUS-Gold hits more than six-month low as dollar, equities rebound

    * Europe claws higher after China enters bear territory
    * Dollar recovers from one-week low amid rising trade
tensions
    * Palladium hits lowest since early April

 (Updates prices; adds comment, byline, NEW YORK to dateline)
    By Renita D. Young and Maytaal Angel
    NEW YORK/LONDON, June 26 (Reuters) - Gold hit its lowest in
over six months on Tuesday as a selloff in global risk assets
eased and the precious metal remained under pressure from the
prospect that rising U.S. interest rates will further support
the dollar.
    Modest gains from Europe's main bourses relieved nervy
investors after the latest escalation in an increasingly global
trade dispute pummeled Wall Street and sent China into bear
market territory.            
    Rising equities tend to weigh on gold, which is widely seen
as a safe-haven asset compared with higher-risk stocks. 
    Spot gold        dropped 0.6 percent at $1,257.53 per ounce
by 1:34 p.m. EDT (1734 GMT), having hit its weakest since
mid-December at $1,254.16.
    U.S. gold futures         for August delivery settled down
$9, or 0.7 percent, at $1,259.90 per ounce.
    The dollar rose against its rivals as the escalating
concerns of a trade conflict between the world's two biggest
economies pushed markets to unwind their bets in high-yielding
currencies.       
    A stronger dollar makes dollar-denominated gold costlier for
non-U.S. investors. 
    "The dollar (has been) a lot stronger, that's the main
driver here. Also, gold hasn't seemed to benefit from the
(trade) turmoil, so I imagine that's made some longs throw in
the towel," said Matthew Turner, commodities strategist at
Macquarie.
    One trader, however, says bullion is being pressured more
from speculators and investors abandoning their positions.
    "Gold is being driven by some capitulation in investors,
rather than being primarily driven by the dollar," said Rob
Haworth, senior investment strategist for U.S. Bank Wealth
Management.
    Gold-backed exchange-traded funds tracked by Thomson Reuters
were headed for their weakest month since July 2017, as
investors covered losses in equities, commodities and other
markets caused by tariff disputes.             
    "Trade tensions aren't helping gold at all, there is only
one clear trend which is skewed to the downside," said
ThinkMarkets chief market analyst Naeem Aslam.
    Enhancing tensions, U.S. Treasury Secretary Steven Mnuchin
said forthcoming investment restrictions from the department
will not be specific to China, but would apply "to all countries
that are trying to steal our technology."              
    Helping the dollar, Fed Chairman Jerome Powell last week
said the U.S. central bank should continue with a gradual pace
of interest rate rises amid a strong economy to balance its
employment and inflation goals.             
    Meanwhile, silver        lost 0.3 percent at $16.26 an
ounce, slipping to $16.10, its lowest since May 1.
    Platinum        fell 0.3 percent to $867.40 an ounce, while
palladium        rose 2 percent to $958.25, after having earlier
touched its lowest since early April at $929.72.

 (Additional reporting by Karen Rodrigues in Bengaluru; editing
by Louise Heavens and G Crosse)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below