August 16, 2016
Gold Rises as U.S. Rate Hike Prospects Lose Steam
(Reuters) - Gold rose for a second day on Tuesday as the dollar slipped on lower expectations of a U.S. Federal Reserve interest rate hike this year due to mixed macro economic signals in the world's largest economy.
Spot gold was up about 0.6 percent at $1,346.31 an ounce at 0348 GMT. The metal rose 0.2 percent on Monday.
U.S. gold rose 0.3 percent to $1,351 an ounce.
"The gold market is in the balance of long and short buyers.
Both sides are waiting for more economic data to determine the trend," said Jiang Shu, chief analyst at Shandong Gold Group.
"Most investors are not very aggressive as they are not certain about which road they should choose."
Markets will look to U.S. data later in the day including consumer prices, housing starts and industrial output for another chance to gauge the health of the economy.
Spot gold may revisit its Aug. 12 low of $1,333.50 per ounce, as it could have completed a bounce from this level, Reuters technical analyst Wang Tao said.
Initial resistance for gold is at the important $1,350 level, whilst first support comes in around $1,335-1,336," trading firm MKS Pamp said in a note.
Central bankers and governments must come up with new policies to buffer their economies against persistently low interest rates that threaten to make future recessions deeper and more difficult to avoid, San Francisco Fed President John Williams said.
The greenback was put on the defensive after weaker-than-expected U.S. data on Friday dented prospects of a near-term rate hike the Fed.
The dollar index slipped 0.2 percent to $95.41 against a basket of currencies.
A stronger dollar discourages gold buying by making the metal more expensive in other currencies.
Asian shares rose to one-year highs, expanding their gains this year to almost 10 percent, supported by a jump in oil prices and investor expectations of an extended phase of easy monetary policy around the globe.
Soros Fund Management LLC sharply cut its shares in gold in the second quarter, while New York-based Paulson & Co, led by John Paulson, kept its stake in SPDR Gold Trust unchanged, U.S. Securities and Exchange Commission filings showed on Monday.
Silver was up 0.6 percent at $19.91 an ounce.
Platinum, which hit a near three-week low of $1,105.50 earlier in the session, was up 1.4 percent at $1,122.80.
Palladium was up about 0.5 percent at $696.70. It hit a three-week low of $679.72 on Monday.