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Gold prices hit three-week high on fading US rate hike prospects

Gold prices hit a fresh three week high early Thursday, after jumping 1.5 percent overnight, helped by a weaker dollar and diminishing expectations of an interest rate hike by the U.S. Federal Reserve at its meeting next week.

Gold prices hit three-week high on fading US rate hike prospects
gold slipped at the domestic bullion market here today due to subdued offtake from jewellery traders and poor local buying support amid bearish global cues (Reuters)

Gold prices hit a fresh three week high early Thursday, after jumping 1.5 percent overnight, helped by a weaker dollar and diminishing expectations of an interest rate hike by the U.S. Federal Reserve at its meeting next week. Spot gold was nearly flat at $1,262.26 an ounce by 0054 GMT, having earlier hit $1,266.01, its best since May 18.

The safe haven asset, which climbed about 1.5 percent on Wednesday, has gained about 19 percent in 2016 so far. U.S. gold rose 0.2 percent to $1,265.20 The dollar index inched 0.1 percent lower to 93.511 , not far from a five-week low of 93.425 plumbed on Wednesday. Signs are emerging that a downturn in the United States and China, the world’s two biggest economies, may have bottomed out, the OECD’s monthly leading indicator showed on Wednesday.

Japan’s core machinery orders tumbled 11.0 percent in April from the previous month, Cabinet Office data showed on Thursday, in a sign that business investment is contracting. Russia produced 67.75 tonnes of gold in January-April 2016, up from 63.27 tonnes in the same period last year, the finance ministry said in a statement on Wednesday.

For the first time in five years, Barrick Gold and other bullion miners are getting ready to expand, breaking from their monologue on cutting costs and debt because of tumbling gold prices. Workers belonging to the major union at South Africa’s Northam Platinum said on Wednesday they would not resume work at its Zondereinde mine until arrests were made for a spate of murders.

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First published on: 09-06-2016 at 07:17 IST