February 7, 2018 / 11:25 AM / 2 months ago

PRECIOUS-Gold slips as stronger dollar pushes metals liquidation

    * Spot gold may test support at $1,316/oz - technicals
    * Platinum hit price premium over palladium
    * Platinum/Palladium ratio: tmsnrt.rs/1QjSZAC

 (Recasts throughout; updates prices, headline; adds comment,
NEW YORK to dateline)
    By Renita D. Young and Maytaal Angel
    NEW YORK/LONDON, Feb 7 (Reuters) - Gold slipped on Wednesday
as the U.S. dollar strengthened and global shares clawed their
way off two-month lows, though bullion was underpinned by the
view that the dollar's bear run remains in place despite rate
hike expectations.
    Platinum briefly moved into a price premium over palladium
for the first time since October.             
    The U.S. dollar rose on Wednesday against most major
currencies, even as gains on Wall Street dimmed the greenback's
safe-haven allure after days of equities volatility.
                    
    A stronger dollar makes dollar-priced gold costlier for
non-U.S. investors.
    World stocks clawed their way back from two-month lows on
Wednesday, though momentum was weak.            
    Spot gold        dropped 0.9 percent at $1,313.67 per ounce
by 1:41 p.m. EST (1841 GMT), earlier hitting $1,311.66, its
lowest since Jan. 10.    
    U.S. gold futures         for April delivery settled down
$14.90, or 1.1 percent, at $1,314.60 per ounce. 
    "The rising dollar index is continuing to push liquidation
in gold and the other precious metals," said Phillip Streible,
senior commodities strategist at RJO Futures. "Gold is not
always the safe-haven asset, especially when interest rates are
rising quickly."
    Gold failed to capitalize this week from the biggest selloff
in six years in global equities as U.S. Treasury yields have
recently risen, but bullion, still driven largely by dollar
movement, is not poised to unwind.
    "What we are seeing now (on the stock markets) is just a
correction, and the dollar is still weakening (longer term),"
said Carlo Alberto De Casa, chief analyst at Activtrades. 
    "I'm expecting gold to remain above $1,300 in the next few
months. The problem for gold would be four (U.S.) rate hikes,
but I don't believe (that will happen). At this stage inflation
is still under control," he added.   
    Traders dialed back bets the U.S. central bank would ratchet
up the pace of rate increases on Monday to between two and three
hikes from three to four hikes last week, according to interest
rates futures. 
    Platinum        fell 1.4 percent at $975.24 per ounce after
earlier touching $972, its lowest since Jan. 11. The
platinum/palladium ratio, which has averaged 0.94 over the last
six months, had reached 1.0002, putting platinum at a premium
over palladium of 18 cents. 
    Palladium        fell 2.4 percent at $983.97 per ounce,
having touched $978.55, its lowest since Nov. 15.   
    Spot silver        fell 1.7 percent at $16.35 per ounce
after dropping to $16.26, its lowest since Dec. 22.

 (Additional reporting by Nithin Prasad and Nallur Sethuraman;
Editing by and Susan Fenton and Editing by Chizu Nomiyama)
  
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