1. Gold eases, but underpinned by weaker dollar

Gold eases, but underpinned by weaker dollar

Spot gold eased on Monday, but found support from a weaker dollar as the U.S. and European central banks kept alive the prospect of cheaper capital for longer.

By: | Published: March 21, 2016 8:23 AM
gold price

Spot gold edged down by 0.2 percent to ,252.21 an ounce. (Reuters)

Spot gold eased on Monday, but found support from a weaker dollar as the U.S. and European central banks kept alive the prospect of cheaper capital for longer.

As central bank rhetoric turns more dovish, investors will search for further hints of easing in a week with few data releases to indicate whether years of loose monetary policy are having any material effect.

Central banks however are leaving themselves with fewer policy tools, which means there’s a diminishing window for fresh upside for gold based on further easing steps, said chief investment officer Jonathan Barratt of Ayers Alliance in Sydney.

“In my mind there’s still concerns out there on price.”

Spot gold edged down by 0.2 percent to $1,252.21 an ounce by 0208 GMT, having finished last week a tad higher. Prices are consolidating below a 14-month peak of $1,282.51 struck on March 11, which was the loftiest since Jan 2015.

Prices had slumped below $1,050 a tonne in December. U.S. gold eased by 0.1 percent to $1,253.10.

Market indicators are flashing signs that investors see inflation – after it was almost non-existent since the credit crisis – on the rise, despite scepticism from the Fed and the relatively slow pace of U.S. economic growth.

Inflation tends to burnish the investment allure of commodities because it consists of a rise in the value of hard assets.

Supporting precious metals, the dollar stayed on the defensive early on Monday, having extended its losses for a third week in the wake of dovish signals from the Federal Reserve.

Money managers trimmed their bullish gold bets from a 13-month high in the week to March 15, as they also cut a net long position in copper, U.S. Commodity Futures Trading Commission data showed on Friday.

In other metals, platinum and palladium edged down half a percent to $967 and $585.72 respectively.

Calculate your income tax post budget 2018 through this Income Tax Calculator, get latest news on Budget 2018 and Auto Expo 2018. Like us on Facebook and follow us on Twitter.

Tags: Gold Prices
  1. No Comments.

Go to Top