Reuters logo
PRECIOUS-Gold touches nearly three-week low as ECB plan lifts dollar
October 26, 2017 / 4:34 AM / in 24 days

PRECIOUS-Gold touches nearly three-week low as ECB plan lifts dollar

    * ECB will extend lifespan of bond-buying program
    * Graphic: World FX rates in 2017-tmsnrt.rs/2egbfVh

 (Updates prices; adds comment, NEW YORK dateline)
    By Renita D. Young and Maytaal Angel
    NEW YORK/LONDON, Oct 26 (Reuters) - Gold fell to a nearly
three-week low on Thursday as the dollar gained against the euro
after the European Central Bank said it would extend the
lifespan of its bond-buying program.
    The bank also decided to cut back bond purchases, a widely
expected move that was factored into gold prices and the dollar,
and the extension of the bond-buying program took the wind out
of the euro's rally against the dollar       . 
    European stock markets gained following the decision as
investors started to price out future rate increases, moving
away from safe-haven gold and bonds and into stocks and other
assets perceived as risky.                     
    A strong greenback makes dollar-priced gold costlier for
non-U.S. investors. 
    "Stocks are at extremely high levels in the U.S., but I
think Europe is going to start playing catch-up," said Forex.com
analyst Fawad Razaqzada. "I'm bearish on gold while we remain
below $1,300."
    Spot gold        was down 0.7 percent at $1,267.61 an ounce
by 2:10 p.m. EDT (1810 GMT) after touching $1,266.27, its lowest
since Oct. 6. U.S. gold futures         for December delivery
settled down $9.40, or 0.7 percent, at $1,269.60 per ounce. 
    Also weighing on gold and boosting the dollar was fresh
speculation that the next U.S. Federal Reserve chair could be a
policy hawk following reports that current Chair Janet Yellen is
out of the running.             
    On Tuesday, U.S. President Donald Trump polled Republicans
on whether they would prefer Stanford University economist John
Taylor or Fed Governor Jerome Powell for the job. More senators
preferred Taylor.                          
    Taylor would be more likely to raise interest rates, said
John Lawrence, senior trader at Heraeus Precious Metals in New
York. 
    "If Yellen is out of the race, that takes out some of the
dovish nature," Lawrence said. "The dollar is stronger."
    Gold is likely to flatline for another year in 2018 as
rising U.S. interest rates clip momentum, a Reuters poll showed
on Thursday, while silver forecasts were cut again after the
metal lagged forecasts in the third quarter.             
    Silver        dropped 0.9 percent to $16.76 an ounce after
touching $16.72, its lowest since Oct. 6.
    Platinum        fell 0.7 percent to $914 an ounce, while
palladium        climbed 1.05 percent to $970.60 an ounce.
    "On current levels, a lot of bad news is priced into
platinum, while palladium still looks due for a correction with
another dent in global car sales looming," Julius Baer Group
said in a note.

    
 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
David Evans and Lisa Von Ahn)
  

Our Standards:The Thomson Reuters Trust Principles.
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