Gold price set to post sharpest monthly fall in 19 months
Bengaluru -India (June 29) Gold prices rose on Friday after hitting a more than six-month low in the previous session as the dollar retreated from recent highs amid a rising euro, but the yellow metal looked set to post its sharpest monthly fall in 19 months.
Spot gold was 0.3 per cent higher at $1,250.98 an ounce, as of 0649 GMT. On Thursday, it had touched $1,245.32, its lowest since December 13, 2017.
“The dollar is still strong, so we expect gold prices to head down,’’ said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
“Gold is weak now and people are not looking to invest at this point of time,” he said.
The yellow metal was on track for a third straight weekly decline, having slipped 1.4 per cent so far this week. Spot gold was down about 3.6 per cent for the month, heading for its biggest monthly drop since November 2016. US gold futures were up 0.1 percent at $1,252.50 an ounce.
Deal on migration
The euro jumped more than a half cent after European Union leaders reached an agreement on migration, a thorny issue that has threatened EU unity and the fate of German Chancellor Angela Merkel.
A stronger euro potentially boosts the demand for gold by making dollar-priced bullion cheaper for European investors.
The dollar index against a basket of six major currencies was down 0.6 per cent at 94.856, after having risen to about one-year high on Thursday. But the index was up 5.4 per cent this quarter, supported mainly by rising US interest rates and an improving U.S. economy.
“There is feeling in some quarters that we may be nearing the bottom of this recent downturn,” MKS PAMP Group trader Tim Brown wrote in a note.
Support-wise, gold appears fairly well bid around $1,245-$1,248 and there should be support at $1,237 and below that, Brown said.
The US economy slowed more than previously estimated in the first quarter amid the weakest consumer spending in nearly five years, but growth appears to have since regained momentum on the back of a robust labor market and tax cuts.
However, St. Louis Fed president James Bullard had on Thursday said tight US labour markets could bring unemployment rates for blacks and Hispanics more in line with that of whites, another reason for the Federal Reserve to stop raising interest rates.
In other precious metals, spot silver gained about 1 per cent to $16.05 an ounce. It was heading for its biggest weekly decline since the week ended April 27, down 2 per cent for the week.
Palladium rose 0.6 per cent to $949.82 an ounce. Platinum was up 0.3 per cent at $850 per ounce. It hit its lowest since January 2016 at $837.30 earlier in the session. It was down 9 per cent for the quarter, its worst since the quarter ended December 2016.
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