Swissgold Logo

 
 
  • Home
  • About Us
    • Who we are
    • Mission Statement
  • Services
  • Account Opening
  • News & Events
  • Contact Us

August 10, 2016

Gold Rises for Second Day as Dollar Drops on Soft U.S. Data

(Reuters) - Gold rose for a second day on Wednesday as investors sought hard assets amid a drop in the dollar after a report of weaker U.S. economic data increased expectations that the Federal Reserve would not raise interest rates in the short-term.   

Spot gold climbed 0.6 percent to $1,348.91 an ounce by 0311 GMT. The yellow metal gained 0.4 percent on Tuesday.
   
U.S. gold was up 0.6 percent at $1,355 an ounce.
   
Palladium surged over 6 percent to touch a high of $745 an ounce, the highest since June 11, 2015.
   
U.S. worker productivity fell for the third straight quarter in the spring this year, suggesting that corporate profits may continue to decline and wage growth may remain sluggish.
 
The dollar index, which gauges the greenback against a basket of six major currencies, fell 0.4 percent to 95.777.
   
"It's a noisy trading without trend. With a falling dollar, we would see short term rise in gold and silver prices," said Jiang Shu, chief analyst at Shandong Gold Group. "The dollar is due for a rising trend and the gold rally, although it has some short term upside, can't last very long."
   
With no major new economic indicators due this week, Shu expects gold to trade in a range of $1,330 to $1,350 an ounce.
   
Spot gold may gain more to $1,354 per ounce, as it has cleared a resistance at $1,346, according to Reuters technical analyst Wang Tao. 
   
The unexpected drop in productivity may confirm the Fed's worst fears of a U.S. economy slipping into an extended period of slow growth with little it can do about it. 
   
"A better tone to equity markets, coupled with the increasing odds of a Fed move later this year suggest that the dollar should likely do better over the second half of the year. The combination of this should constitute a net negative for gold," INTL FCStone analyst Edward Meir said in a note.
   
Gold is highly sensitive to rising U.S. interest rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which the metal is priced.
   
Investment interest in gold-backed exchange-traded funds was less buoyant than in recent months with holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, falling for a second straight day on Tuesday. Holdings slipped 0.12 percent to 972.62 tonnes from Monday. 
   
Spot silver was up nearly 1 percent at $20.02 an ounce.
   
Spot platinum rose 1.3 percent to $1,164.85.

 

Market Update

  • Precious Metals & FX
  • Bid
  • Offer
Note: Rates displayed here are not live, just for the information purpose and not for the trading.


  • Home
  • Services
  • Account Opening
  • News & Events
  • Contact Us
  • Privacy Policy
  • Disclaimer
Copyright © 2021 Swiss Gold DMCC. All rights reserved.