Gold & Silver

Gold falls to 1-month low as dollar gains on Fed hike view

Reuters Manila | Updated on January 20, 2018 Published on March 28, 2016

gold

Gold dropped to its weakest in a month on Monday, pressured by a firmer dollar following hawkish comments from US Federal Reserve officials that suggested at least two interest rate hikes this year, with the first potentially coming next month.

It marked further losses for bullion which fell the most since November last week as the dollar gained traction on prospects of higher US interest rates in the near term.

St. Louis Fed President James Bullard was the latest to add his voice to policymakers supporting a rate hike, possibly as soon as in the next policy meeting in April.

But Bullard also said he was undecided on whether to push for an April rate increase in part because the US central bank will have seen little more economic data in the interim.

“While we have stated that Fed tightening may not be as negative for gold as in previous tightening cycles, an April rate rise would likely knock gold lower near term,” HSBC analyst James Steel wrote in a report.

Steel, however, said gold’s retreat may be temporary if the Fed only lifts interest rates twice this year which “should allow the market to hold above $1,200 support’’.

Spot gold was down 0.5 per cent at $1,209.85 an ounce by 0237 GMT. It touched a session-low of $1,208.90, its cheapest since February 23. The metal lost 3 per cent last week.

The dollar was trading at a 1-1/2-week high versus a basket of currencies, extending last week’s gains as expectations for an April US rate hike strengthened.

Trading was likely to remain slow on Monday with other markets, including London, still shut for Easter holidays.

US gold for April delivery slipped 0.9 percent to $1,210.40 an ounce.

Inflows into gold exchange-traded funds (ETF) continued, however, suggesting confidence in bullion remained.

SPDR Gold Trust, the world’s largest gold-backed ETF, said its holdings rose to 26.48 million ounces on Thursday, the highest since December 2013.

Russia and Kazakhstan extended their gold buying spree in February by adding to their bullion reserves, while Malaysia and Turkey cut their bullion holdings, data from the International Monetary Fund showed on Friday.

Spot silver was steady at $15.168 an ounce and so was palladium at $574.15. Platinum gained 0.2 per cent to $945.90 an ounce.

Published on March 28, 2016

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
null
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.