July 23, 2018 / 4:29 AM / in 4 months

PRECIOUS-Gold steady as dollar softens on Trump interest rate comments

    * Dollar falls to near two-week low
    * Net short position in gold for first time since 2016 -
CFTC

 (Adds comment, details, updates prices)
    By Karen Rodrigues
    BENGALURU, July 23 (Reuters) - Gold prices were steady on
Monday near a one-week high as the dollar eased to its lowest in
nearly two weeks after U.S. President Donald Trump criticised
the Federal Reserve's interest rate tightening policy.
    Spot gold        held steady at $1,231 an ounce at 0738 GMT.
The yellow metal touched its highest since July 17 at $1,235.10,
earlier in the session.
    U.S. gold futures         for August delivery were nearly
unchanged at $1,231 an ounce. 
    The dollar index       , which measures the greenback
against a basket of six major currencies, was down 0.1 percent
at 94.340. It fell to its weakest since July 11 during the
session.        
    "Comments over the weekend from Trump changed the
environment somewhat, with the apparent push now to really
weaken the U.S. dollar," said ANZ analyst Daniel Hynes.
    The dollar has been a significant headwind for gold over the
past month or so. It opens up the possibility that we will not
see that continued strength in the U.S. dollar, Hynes added.
    A weaker greenback makes dollar-priced gold cheaper for
buyers using other currencies.
    Trump on Friday reinforced his criticism of the Federal
Reserve's policy on raising interest rates, saying it takes away
from the United States' 'big competitive edge' and could hurt
the U.S. economy.             
    Meanwhile, the bullion, which usually gains from political
and economic tensions has struggled this time around.
    Trump warned Iranian President Hassan Rouhani on Sunday not
to threaten the United States or face the consequences, hours
after Rouhani told Trump that hostile policies toward Tehran
could lead to "the mother of all wars."             
    Trump on Friday said he was ready to impose tariffs on all
$500 billion of imported goods from China, threatening to
escalate a clash over trade policy that has unnerved financial
markets.             
    "The overall sentiment is negative when it comes gold. This
is despite the fact that we have seen more tension between U.S.
and Iran," said Naeem Aslam, ThinkMarkets.com chief market
analyst.
    "However, the net impact isn't that big at all. The dollar
weakness has brought some life for gold but nothing major there
as well." 
    Hedge funds and money managers switched to a net short
position in COMEX gold contracts for the first time since 2016
in the week to July 17, U.S. Commodity Futures Trading
Commission (CFTC) data showed on Friday.        
    In other precious metals, silver        was up 0.1 percent
at $15.49 an ounce.
    Palladium        fell 0.7 percent at $888.20 an ounce and
platinum        was 0.2 percent higher at $827.70 an ounce.

 (Reporting by Karen Rodrigues in Bengaluru; Editing by
Christian Schmollinger and Vyas Mohan)
  
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