Gold futures steady near 1-week highs
London (May 13) Gold prices were steady near one-week highs on Wednesday as the dollar remained softer ahead to U.S. economic data later in the day.
Gold futures for June delivery were at $1,193.5 a troy ounce, not far from Tuesday’s one-week highs of $1,196.3.
The precious metal rose in the previous session as the dollar weakened across the board amid a selloff in global bond markets.
German bund yields jumped, narrowing the gap with their U.S. counterparts as deflation fears eased amid recovering oil prices and following the introduction of the European Central Bank's massive quantitative easing program.
German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar. Yields rise as prices fall.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Investors were looking ahead to U.S. data on retail sales later in the day, to gauge the strength of the U.S. economy and the timing of a rate increase after recent economic reports pointed to weakness in first quarter growth.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last down 0.11% to 94.53, holding above last week’s two-month trough of 93.96.
The dollar pared losses against the euro earlier after euro zone first quarter economic growth was slightly weaker than forecast.
The euro area economy grew 0.4% in the first quarter of 2015, just shy of forecast of 0.5%. It was still the fastest rate of growth in four years.
Elsewhere in metals trading, silver for July delivery rose 0.94% to $16.68 a troy ounce, while copper for July delivery eased 0.7% to $2.929 a pound.