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Last Updated : May 17, 2019 09:40 PM IST | Source: Reuters

Gold falls to near two-week low as dollar strengthens

The dollar index gained, holding near a two-week high against a basket of currencies, making gold more expensive for holders of other currencies.

Gold prices on May 17 slipped to their lowest in nearly two weeks as the dollar advanced on the back of robust U.S. economic data, putting the metal on track to post its biggest weekly decline in a month.

Spot gold fell 0.8 percent to $1,276.34 per ounce as of 11:18 a.m. EDT (1518 GMT). The metal is down 0.7 percent for the week so far, which could be its biggest weekly decline since April.

U.S. gold futures were also 0.8% lower at $1,276.20 an ounce.

"The dollar has strengthened due to relatively strong U.S. economic reports and little relaxation in geo-political tensions, all these combined has put downward pressure on gold prices," said Jeff Klearman, portfolio manager at GraniteShares.

The dollar index gained, holding near a two-week high against a basket of currencies, making gold more expensive for holders of other currencies.

U.S. consumer sentiment jumped to a 15-year high in early May amid growing confidence over the economy's outlook.

Spot gold fell 0.8% on Thursday, its biggest one-day percentage decline since April, as strong economic data from the United States spurred investors towards riskier assets.

Thursday's sharp fall has dented the technical picture for the metal.

"Bullion prices had broken the bearish trendline that had marked the last few months," Carlo Alberto De Casa, chief analyst with ActivTrades, wrote in a note.

"A clear recovery to the $1,300 level, and prices holding above this psychological threshold, would confirm the supportive scenario seen in the last two weeks, while a fall below $1,280 would be seen as a negative element."

Meanwhile, world share markets pulled back as trade tensions were renewed after Chinese media took a hardline approach to the tariff dispute between the United States and China.

"Despite the risk-off sentiment in the market we are not seeing any underline support coming (for gold). However with geo-political tensions with Iran and ongoing trade talks with China could provide some support going forward," said Alex Turro, market strategist at RJO Futures.

Among other metals, silver was down 0.9% at $14.42 an ounce, after hitting its lowest since Dec. 6 at $14.38 an ounce. Silver is also on track for a decline of about 2% for the week.

Platinum dipped 1.3% to $818.49 per ounce, having hit more than two-month low at $813.50 earlier in the session.

Palladium slipped 1.3% to $1,313.73 an ounce. It has slumped about 19% since the metal used in catalytic converters in car exhaust systems hit a record high of $1,620.53 in March.

Both platinum and palladium are set to record weekly falls, with platinum on course for its biggest such drop in 10 weeks.

 

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First Published on May 17, 2019 09:38 pm
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