1. Gold steady on stronger equities, dollar

Gold steady on stronger equities, dollar

Gold was steady on Tuesday after falling nearly one percent to a three-week low in the previous session as equities and the dollar climbed, while worries over North Korea eased.

By: | Published: May 2, 2017 8:32 AM
Gold was steady on Tuesday after falling nearly one percent to a three-week low in the previous session as equities and the dollar climbed, while worries over North Korea eased. (Reuters)

Gold was steady on Tuesday after falling nearly one percent to a three-week low in the previous session as equities and the dollar climbed, while worries over North Korea eased.

FUNDAMENTALS

* Spot gold was steady at $1,256.60 per ounce, as of 0052 GMT. Bullion prices on Monday dropped 0.9 percent to $1,253.66 an ounce, its weakest since April 11.
* U.S. gold futures were up 0.2 percent at $1,257.60 an ounce.
* Asian shares advanced on Tuesday, helped by rising optimism on the technology industry and easing concerns over North Korea, while the dollar edged up to a one-month high versus the yen.
* Firmer equities discourage the buying of non-interest-paying bullion, which is priced in dollars.
* The dollar hit a one-month high against the yen on Tuesday, lifted by Treasury yields which surged after U.S. Treasury Secretary Steven Mnuchin commented on the possibility of ultra long-term bond issuance.
* Mnuchin also said on Monday that economic growth of three percent is achievable in the next two years as the Trump administration sets out to dramatically cut taxes.
* The Federal Reserve will hold a two-day meeting on Tuesday and Wednesday, with a statement scheduled for release at 2 p.m. EDT (1800 GMT) Wednesday.
* The Fed is widely expected to hold rates steady, but investors will focus on the language of the statement for guidance on the number of rate increases this year and next.
* Interest rate futures are still pricing a roughly 70 percent chance the Fed will raise rates in June, according to the CME’s FedWatch.
* U.S. factory activity slowed in April while consumer spending was unchanged in March and a key inflation measure recorded its first monthly drop since 2001, but economists still expect an interest rate increase in June as the labor market tightens.
* Worries about tensions over the Korean peninsula eased after U.S. President Donald Trump on Monday opened the door to meeting North Korea’s Kim Jong Un, saying he would be honored to meet the young leader under the right circumstances, even as Pyongyang suggested it would continue its nuclear weapons tests.
* A U.S. judge on Monday said he wanted to know whether Iran employs any lawyers for a wealthy Turkish gold trader accused of helping that country evade U.S. sanctions, a team that includes former New York City Mayor Rudolph Giuliani.

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