May 7, 2018 / 4:13 AM / in 2 months

PRECIOUS-Gold retreats from 1-week high on firmer dollar

    * Dollar index hovers near four-month high hit on Friday
    * SPDR Gold holdings down 0.17 percent on Friday
    * Speculators cut net long positions in gold in week to May
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 (Recasts, adds comments, and updates prices)
    By Apeksha Nair
    BENGALURU, May 7 (Reuters) - Gold prices shed earlier gains
to edge lower on Monday, as the dollar held near a four-month
peak, dampening the appeal of bullion.
    Spot gold        was down 0.2 percent at $1,311.91 an ounce
by 0816 GMT. Earlier in the session, it touched $1,318.85, its
highest since April 30.
    U.S. gold futures         for June delivery slipped 0.2
percent to $1,312.60 per ounce. 
    Prices had earlier touched a one-week high, benefiting from
a slightly weaker dollar as investors mulled over the impact of
Friday's mixed U.S. employment data.             
    "Price action suggests that the yellow metal has struggled
to find any real support in April's disappointing U.S. jobs
report," said Jameel Ahmad, head of global currency and market
research at FXTM.   
    The dollar, however, firmed and traded near its 2018 peak
during late Asian hours, as the data did little to temper
perceptions of strength in the U.S. economy.                    
   
    "Traders are taking every opportunity to buy the dollar
index ... This has an impact on the price of the gold," said
Naeem Aslam, chief markets analyst, Think Markets.
    "The U.S. NFP number released on Friday was largely short of
expectation, but investors have still focused on the factors
which are positive; the headline employment number. These
factors are keeping the dollar rally going which is pushing the
gold price lower."    
    Meanwhile, two Federal Reserve officials on Friday said they
were keeping an open mind on the total number of rate hikes
needed this year.               
    U.S. interest rate futures rose modestly on Friday, as
traders still expect the Fed to raise key borrowing costs at its
June 12-13 policy meeting.                      
    "With expectations still heightened over the Fed raising
U.S. interest rates in June and the dollar appreciating further,
the yellow metal looks at risk to another round of selling
pressure," Ahmad said.
    Gold is highly sensitive to rising U.S. rates as these tend
to boost the dollar in which it is priced.
    Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, fell 0.17 percent to 864.13
tonnes on Friday.             
    Speculators trimmed their net long positions in COMEX gold
by 62,378 contracts to 51,985 contracts in the week to May 1,
U.S. data showed on Friday.             
    "Friday's CFTC data indicate that prices should bottom out
soon. The mood among speculative investors is very bearish
already," said Carsten Fritsch, commodity analyst at Commerzbank
in Frankfurt.
    Spot silver        lost 0.3 percent to $16.43 an ounce.
    Platinum        advanced 0.4 percent to $909.74 an ounce,
having earlier hit its highest since April 25 at $918.70. 
    Palladium        rose about 1 percent to $976 an ounce,
after earlier reaching $978, its strongest since April 27. 

 (Reporting by Apeksha Nair in Bengaluru; Editing by Joseph
Radford and Sherry Jacob-Phillips)
  
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