Gold prices steady after falling in the previous session

By: | Published: July 12, 2016 6:39 AM

Gold prices was steady early Tuesday after falling in the previous session, with markets assessing whether the latest U.S. jobs data boosted the prospects of an early interest rate hike by the Federal Reserve.

A combination of a weaker U.S. dollar, along with a return of Asian demand should continue to support gold prices in the second half of 2016, Citigroup said in a note. (Reuters)A combination of a weaker U.S. dollar, along with a return of Asian demand should continue to support gold prices in the second half of 2016, Citigroup said in a note. (Reuters)

Gold prices was steady early Tuesday after falling in the previous session, with markets assessing whether the latest U.S. jobs data boosted the prospects of an early interest rate hike by the Federal Reserve. Spot gold was little changed at $1,354.60 per ounce by 0039 GMT. It fell 0.8 percent on Monday, its biggest decline in nearly two weeks, to close at $1,354.85. U.S. gold was also little changed at $1,356 an ounce.

Asian stocks held firm around a 2-1/2-month peak on Tuesday, a day after U.S. shares hit a record high thanks to a combination of upbeat U.S. data and expectations of more stimulus around the world. Kansas City Federal Reserve President Esther George on Monday said U.S. interest rates are too low and signalled she could be ready to restart her push for rate hikes within the Fed’s rate-setting committee.

The sizzling $13.4 trillion U.S. Treasury market cooled a bit on Monday as investors gave a cold shoulder to a $24 billion sale three-year notes, part of $56 billion of new government supply hitting the market this week. The European Central Bank will not ease monetary policy any further at its meeting next week, according to an overwhelming majority of respondents in a Reuters poll of euro money market traders on Monday.

The European Commission has revised down its forecasts for growth in the euro zone and in Britain after the British vote to leave the European Union, in early estimates unveiled on Monday by the economic affairs commissioner Pierre Moscovici. A combination of a weaker U.S. dollar, along with a return of Asian demand should continue to support gold prices in the second half of 2016, Citigroup said in a note. Gold miners expanded the global hedge book by another 50 tonnes in the first quarter after hedging on a net basis for a second straight year in 2015, an industry report showed on Monday. South Africa’s Sibanye Gold SGLJ.J has started talks with unions about cutting jobs at its loss-making Cooke 4 mine though the largest union in the gold sector has vowed to fight any reductions.

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