July 12, 2016
Gold Keeps Losses as Asian Stocks Rally
(Reuters) - Gold on Tuesday held near lows touched in the previous session as Asian stocks rallied and markets assessed whether the latest U.S. jobs data has boosted the prospects for an interest rate hike by the U.S. Federal Reserve.
Spot gold was little changed at $1,354.45 per ounce by 0430 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 $1,356.10 an ounce.
Asian stocks hit a 2-1/2-month peak on Tuesday, a day after Wall Street shares rose to a record high on a combination of upbeat U.S. data and expectations of more stimulus from global policymakers.
Gold was coming under presure after strong non-farm payrolls data that had boosted some expectations for a U.S. rate hike, said said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
"In the near-term there should be some resistance for prices," To said. "However, there should not be much downward pressure after the pullback as the U.S. Fed will not raise interest rates anytime soon."
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.
Lower rates tend to boost gold prices because they cut the opportunity cost of holding non-yielding bullion while weighing on the dollar, in which it is priced.
"Not too long ago, gold prices would have withered on prospects of higher stock prices, but not this time around; investors are thinking that the spate of monetary easing is likely to persist for some time to come, keeping both gold and equities fairly well supported," said INTL FCStone analyst Edward Meir.
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.
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.
Silver XAG= was up 0.7 pct at $20.40 an ounce.
Platinum, which rose to a 13-month high of $1,104.10 in the previous session, fell for the first time in two weeks. It was down 0.9 percent at $1,089.45 an ounce.
Palladium was down 0.8 percent at $616.85 an ounce.