Comments
Gold prices rose for a second straight day on Thursday as risk averse sentiment amid weaker oil prices drove up the demand for the metal, with a softer dollar and weakness in US Treasury yields also lending support.
Spot gold rose 0.5 per cent to $1,252.41 per ounce at 0812 GMT. It rose 0.3 per cent in the previous session, its largest intraday percentage change since June 6. US gold futures for August delivery rose 0.6 per cent to $1,253.30 per ounce.
“A softer US dollar and a risk-off bias following the recent declines to crude saw gold turn higher during Asian hours on Thursday,” MKS PAMP trader Sam Laughlin said in a note.
Crude oil falls
Oil turned lower on Thursday after posting gains earlier in the session as traders look ready to test new lows for crude prices with worries persisting over a global glut.
“The uncontrolled oil price spill in the futures markets may have seen some traders pushing the risk aversion button and buying gold,” said Jeffrey Halley, senior market analyst at OANDA.
“The primary driver appears to be the flattening of the longer-dated US Treasury curve.”
US Treasury yield
The US Treasury yield curve flattened to almost 10-year lows on Wednesday as investors evaluated the impact of hawkish Federal Reserve policy on the economy even as inflation measures are deteriorating.
US home resales unexpectedly rose in May to the third highest monthly level in a decade and a chronic inventory shortage pushed the median home price to an all-time high.
Gold is highly sensitive to rising rates and yields, which increase the opportunity cost of holding non-yielding assets such as bullion while boosting the dollar, in which it is priced.
“Investors are waiting for any clues on whether the timing of the next rate hike is September or December,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
Spot gold may bounce more into a range of $1,257 to $1,261 per ounce, as it has cleared a resistance at $1,251, according to Reuters technical analyst Wang Tao.
The US dollar index , which measures the greenback against a basket of six currencies, retreated from a one-month high of 97.871 set on Tuesday.
Holdings in SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.04 per cent to 853.98 tonnes on Wednesday.
Among other precious metals, silver gained 1 per cent to $16.61 per ounce. Platinum touched its highest in a week during the session and was up 0.6 per cent to $929.20 per ounce, while palladium slipped 0.8 per cent to $880.99 per ounce.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.