June 16, 2017 / 8:13 AM / in 5 months

PRECIOUS-Gold hits 3-week low as dollar firms

    * Gold prices mark weakest since May 24
    * Silver on track for biggest weekly fall since early May
    * Palladium on track for first weekly decline in four

 (Updates prices)
    By Nithin ThomasPrasad
    BENGALURU, June 16 (Reuters) - Gold prices hit a three-week
low on Friday and were on track for a second weekly fall,
dragged down as upbeat U.S. economic data supported the dollar.
    The dollar index        firmed after data showed the number
of Americans filing for unemployment benefits fell more than
expected last week.                    
    Robust economic data could encourage the U.S. Federal
Reserve to raise interest rates again this year following a hike
this week.
    "The strengthening of the dollar (is weighing on gold)...
and after the latest Fed interest rate hike people are waiting
to see when the Fed will raise rates next," said Brian Lan,
managing director at gold dealer GoldSilver Central in
Singapore.
    Higher interest rates tend to boost the dollar, putting
pressure on gold prices by increasing the opportunity cost of
holding non-yielding bullion.
    Spot gold        remained unchanged at $1,253.50 per ounce,
as of 0758 GMT. Earlier in the session, it hit $1,251.05, its
weakest since May 24. The metal has fallen about 1 percent so
far this week. 
    U.S. gold futures         for August delivery rose 0.1
percent to $1,256.4.
    "The fact that the dollar is nudging higher, should continue
to pressure the market, while the churn in U.S. equities is
still not serious enough to warrant a flight to safety into the
precious metal," said INTL FCStone analyst Edward Meir.   
    "We think gold will likely have another $20-$25 on the
downside before encountering more serious support."
    Meanwhile, holdings in SPDR Gold Trust      , the world's
largest gold-backed exchange-traded fund fell 0.14 percent to
853.68 tonnes on Thursday.           
    Among other precious metals, spot silver        was headed
for its biggest weekly decline in six weeks. The metal gained
0.5 percent at $16.84 per ounce, after hitting $16.64 in the
previous session, its weakest since May 19.
    "Price action in both gold and silver of late seems to imply
that traders still have plenty of short-term long positioning on
their books," said Jeffrey Halley, senior market analyst at
OANDA.
    "It may leave both metals vulnerable to a further washout
into the weekend if the U.S. dollar strength persists."  
    Platinum        slipped 0.2 percent to $917.60 per ounce.
The metal had hit its lowest in more than one month on Thursday.
    Meanwhile, palladium        dropped 0.6 percent to $864.05
per ounce, as it moved towards its first weekly decline in four
weeks.

 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by Joseph Radford and Sherry Jacob-Phillips)
  

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