Gold, silver slide to seven-month lows as dollar climbs

By Renita D. Younger and Pratima Desai

NEW YORK/LONDON (Reuters) – Gold and silver costs slid to seven-month lows on Friday because the greenback rose to a two-week peak, buoyed by safe-haven purchases made in an ongoing U.S.-China tariff commerce warfare. Demand for the dear metals additionally waned on expectations of upper U.S. rates of interest.

Spot gold misplaced 0.5 % at $1,240.90 per ounce by 1:34 p.m. EDT (1734 GMT), after earlier falling to $1,236.58, its lowest since Dec. 12. U.S. gold futures settled down $5.40, or 0.four %, at $1,241.20 per ounce.

Gold costs are down about 9 % since mid-April. Bullion is heading for a 1 % weekly decline.

Silver fell 0.6 % at $15.80 an oz, earlier hitting $15.67 per ounce, its lowest since Dec. 13. The white metallic is heading for a 1.2 % weekly drop.

The U.S. greenback was little modified after peaking at a two-week excessive on Friday in opposition to a basket of currencies after information exhibiting a document Chinese language commerce surplus, which can add gasoline to U.S.-China commerce tensions, spurred extra traders to pile into the security of the buck.

A rising U.S. forex makes dollar-denominated gold costlier for holders of different currencies, which doubtlessly weighs on demand. [FRX/]

“We (additionally) have elevated expectations of Fed price will increase,” mentioned Rob Haworth, senior funding strategist for U.S. Financial institution Wealth Administration.

The Fed’s semi-annual report back to Congress on Friday pointed to “stable” U.S. financial progress throughout the first half of the yr, and reiterated that the U.S. central financial institution anticipated to proceed to lift rates of interest step by step.

Greater rates of interest make gold costlier to personal since bullion doesn’t earn any curiosity or dividends, and prices cash to retailer and insure.

Speculators not too long ago minimize their internet lengthy place in COMEX gold to the weakest place since January 2016.

“Bullish hypothesis is now at a brand new low. We’re reaching some extent the place we could also be pausing right here,” Haworth added.

Holdings for the most important gold-backed exchange-traded-fund, New York’s SPDR Gold Belief, have fallen greater than eight % since late April to beneath 26 million ounces. [HLDSPDRGT=XAU]

Platinum misplaced 1.9 % at $823.50 an oz, and palladium dropped 1.6 % at $934.80. Each had been headed for a virtually 2 % weekly decline.

“The worldwide commerce dispute is threatening to disrupt auto gross sales, putting a query mark over platinum and palladium demand,” ANZ analysts mentioned in a word.

“Whereas auto gross sales numbers recommend regular demand progress for palladium, count on a average decline in auto catalyst demand for platinum this yr.” Extra platinum than palladium is utilized in diesel engines, whose gross sales have fallen since Volkswagen was present in 2015 to have cheated in emissions exams.

(Further reporting by Apeksha Nair in Bengaluru; Enhancing by Edmund Blair and Phil Berlowitz)

This story has not been edited by Firstpost employees and is generated by auto-feed.

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