Gold Little Changed Near 2-Week Low as Platinum & Palladium Retreat

New York (Aug 20)  Gold traded little changed in New York after reaching a two-week low as a stronger dollar cut demand. Platinum slipped to a two-month low in the longest run of declines since January.

The dollar rose to a six-month high versus a basket of 10 currencies before the Federal Reserve releases the minutes of its July meeting, which may give clues on when policy makers will raise borrowing costs. Fed Chair Janet Yellen will speak Aug. 22 at a central bankers’ meeting in Jackson Hole, Wyoming. Bullion typically moves inversely to the greenback.

Gold rebounded this year from a 28 percent drop in 2013, partly as geopolitical tensions spurred haven demand. Diplomatic efforts to end the conflict in Ukraine intensified as the government said forces continue to push back pro-Russian separatists in fighting in the country’s east. An Egyptian-brokered truce seeking to end more than a month of hostilities in the Gaza Strip collapsed.

Bullion prices have fallen amid “a firmer dollar and a further ratcheting down of tensions in the Ukraine,” Edward Meir, an analyst at INTL FCStone Inc. in New York, wrote in a note. Improving U.S. data should support the case for higher interest rates and a stronger dollar, “both of which should be bearish for gold over the short-term,” he said.

Gold for December delivery was little changed at $1,295.80 an ounce by 8:06 a.m. on the Comex in New York. Prices, which fell the past three days, reached $1,292.40 today, the lowest since Aug. 6. Bullion for immediate delivery was little changed at $1,295.83 in London, according to Bloomberg generic pricing.

Trading Volume

Futures trading volume was 28 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg show.

U.S. reports this month have shown employers added more than 200,000 workers for a sixth month in July, while a gauge of manufacturing increased and housing starts quickened. Goldman Sachs Group Inc. said it expects further gains in the dollar as money flows out of Europe.

Silver for December delivery rose 0.3 percent to $19.54 an ounce in New York, after reaching a two-month low of $19.425 yesterday. Holdings in silver-backed exchange-traded products rose 91.2 metric tons, the most since May, to a two-month high of 19,719.8 tons yesterday, data compiled by Bloomberg show.

Platinum for October delivery fell 0.5 percent to $1,432 an ounce, after reaching $1,431, the lowest since June 17. It’s down for a sixth day in the longest such run since Jan. 31. Palladium for September delivery lost 1.2 percent to $870.55 an ounce. It touched a 13-year high of $902.75 on Aug. 18.

The metal, mostly used in catalytic converters in vehicles, advanced 21 percent since the start of January as demand is set to outstrip supply for a third straight year. Palladium futures’ 14-day relative-strength index reached 67.8 this week, near the level of 70 that suggests to some traders who study charts that prices are poised to decline. It was at 50.1 today.

Source:  Bloomberg