May 12, 2016
Gold Edges Lower After Best Day Since April as Dollar Steadies
(Reuters) - Gold retreated on Thursday after rising the most since late April the session before as the dollar recovered some lost ground.
But expectations that the U.S. Federal Reserve is unlikely to raise interest rates at its next meeting in June should help gold find strong support at $1,250 an ounce, said OCBC Bank analyst Barnabas Gan.
"The reason for the recent glitter in gold is the downplay of the probability of a Fed rate hike in June. It should give gold a lift for the rest of the quarter," said Gan.
But spot gold came off slightly on Thursday as the dollar regained some footing versus a basket of major currencies after slipping overnight.
Spot gold was down 0.3 percent at $1,273.51 an ounce by 0232 GMT, after climbing off two-week lows overnight. Wednesday's nearly 1-percent gain was bullion's strongest since April 29.
U.S. gold for June delivery was unchanged at $1,275.10 an ounce.
Gold has risen 20 percent this year, benefiting from expectations that the Fed is unlikely to raise interest rates anytime soon.
Those expectations strengthened after data last week showed that the U.S. economy added the fewest jobs in seven months in April.
"If the global growth scenario is not as bullish as what we think it would be and more importantly if the Fed does not move this year, gold should rise to $1,400," said Gan.
Underlining optimism towards the metal, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, stood at 27.07 million ounces on Wednesday, the highest since December 2013.
Investors will be eyeing the weekly U.S. jobless claims tonight for trading cues, with MKS Group trader Jason Cerisola seeing support for gold at $1,260 and resistance at $1,280.
Spot silver slipped 0.4 percent to $17.33 an ounce, platinum dropped 0.5 percent to $1,057.75 and palladium gained 0.2 percent to $605.90.