May 29, 2015
Gold Set for Second Weekly Loss as Dollar Strength Hurts Demand
(Bloomberg) -- Gold headed for a back-to-back weekly decline as a stronger dollar curbed demand for the metal as an alternative investment.
Bullion for immediate delivery traded at $1,190.37 an ounce at 11:22 a.m. in Singapore from $1,188.40 on Thursday, when it fell to the lowest level in more than two weeks, according to Bloomberg generic pricing. The metal has decreased 1.3 percent this week, paring the monthly gain to 0.5 percent. Prices in
Shanghai snapped five days of declines.
Gold has trimmed this year’s advance as the Federal Reserve said it’s on course to raise interest rates in 2015. Data on Thursday showed U.S. jobless claims were below 300,000 for the 12th consecutive week, backing the case for higher borrowing costs as the world’s largest economy improves. Rising rates and a stronger dollar reduce bullion’s allure because the metal generally offers returns only through price gains.
“The dollar is still likely to rise in the short term, so gold will be under a bit of pressure,” Xu Wenyu, an analyst at Huatai Great Wall Futures Co. in Shanghai, said by phone. “I think gold will find a support at about $1,180.”
The Bloomberg Dollar Spot Index, a gauge of the greenback versus 10 major currencies, retreated 0.1 percent in Friday trade, trimming its second straight weekly advance to 0.9 percent. The index is up 2.2 percent in May, on track for its 10th climb in 11 months.
Gold futures for August delivery were little changed at $1,190.20 an ounce on the Comex in New York. While they’re 1.2 percent lower this week, they’re still headed for the first monthly advance since January. Bullion of 99.99 percent purity added 0.1 percent to 237.45 yuan a gram ($1,190.91 an ounce) on the Shanghai Gold Exchange.
China’s net gold imports from Hong Kong fell for a third month in April. Net inbound shipments dropped to 46.6 metric tons from 61.8 tons in March and 65.4 tons a year earlier, according to data compiled by Bloomberg from the Hong Kong Census and Statistics Department on Thursday.
Silver for immediate delivery rose 0.3 percent to $16.7443 an ounce, set for a 3.7 percent gain this month. Spot platinum added 0.1 percent to $1,117.73 an ounce, while palladium lost 0.2 percent to $785.91.