Moneycontrol
Dec 24, 2015 12:42 PM IST | Source: Reuters

Gold edges up after two-day drop in pre-holiday trade

Spot gold rose 0.2 percent to USD 1,072.10 an ounce by 0037 GMT, after losing 0.7 percent in the last two sessions.


Gold rose only slightly on Thursday, after two days of losses, as the metal struggled to find direction in thin pre-holiday trade amid conflicting cues from the currency, equities and energy markets.


FUNDAMENTALS


* Spot gold rose 0.2 percent to USD 1,072.10 an ounce by 0037 GMT, after losing 0.7 percent in the last two sessions.


* Many financial centres around the world will shut early on Thursday and stay closed on Friday for the Christmas holidays. Some will remain shut on Monday.


* On Wednesday, Wall Street rallied, US Treasury yields rose and the dollar edged up after a three-day losing streak.


* Strong equities and dollar typically suppress demand for safe-haven gold.


* But the metal found some support in the energy markets, as oil rose more than 3 percent on Wednesday following a drop to multi-year lows earlier in the week.


* Gold is positively correlated to oil as the metal is seen as a hedge against oil-led inflation.


* Mixed US economic data also did not help gold find direction.


* New orders for US manufactured capital goods fell in November and the prior month's increase was revised sharply lower. But other data on Wednesday showed consumer sentiment at a five-month high in December and personal income rising for an eighth straight month in November.


* Gold prices have shed 9 percent so far this year, a third year of losses, mostly due to expectations the US Federal Reserve would raise interest rates, which it did this month.


* With the first US rate increase in nearly a decade out of the way, the focus is now on the pace of future hikes.


MARKET NEWS

* The dollar, euro and yen got off to a subdued start on Thursday in what is likely to be a languid session with much of the Western world already shuttered for the Christmas and year-end holidays.

Sections
Follow us on
Available On