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Gold set to post worst day in a month as equities rebound


Reuters


By Eileen Soreng and Brijesh Patel

May 16 (Reuters) - Gold was headed for its biggest one-day percentage decline in a month on Thursday, as the dollar gained and investors opted for riskier assets on the back of robust U.S. economic data even as the U.S.-China trade concerns linger.

Spot gold fell 0.8% to $1,285.63 per ounce as of 2:17 p.m. EDT (1817 GMT). Prices were on track for their biggest percentage decline since April 16.

There is risk on sentiment in the equity market and as the U.S. stock market rebounded, that coupled with strength in the dollar is providing headwinds to gold prices, said Alex Turro, market strategist at RJO Futures.

U.S. stock indexes extended gains on upbeat earnings as well as robust economic data that underlined the strength of the domestic economy. Meanwhile, the dollar index rose to its highest level in nearly two weeks against a basket of currencies. USD/

The U.S. housing data showed homebuilding increased more than expected in April, while unemployment benefits fell more than expected last week, pointing to sustained labor market strength that should underpin the economy.

However, there are a lot of geopolitical risks in the Middle East with Iran and the ongoing trade war, which might garner some flight to safety in the near term, Turro added.

Trump administration's decision to sanction and potentially cripple Chinese telecoms giant Huawei Technologies Co Ltd garnered a sharp rebuke on Thursday from Beijing, which warned that the move could damage trade talks.

"A U.S.-China trade theme continues in the world marketplace: one day the two sides are upbeat on a deal getting done; the next day their tone is sour. Such will keep the markets very uncertain on the matter," said Jim Wyckoff, senior analyst at Kitco, in a note.

"The gold bulls and bears are on a level overall near-term technical playing field. First resistance is seen at $1,300 and then at this week's high of $1,304.20."

SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said holdings fell 0.4% to 733.23 tonnes on Wednesday. Holdings are now close to their lowest levels since Oct. 9. GOL/ETF

Among other metals, silver was down 1.8% at $14.53 and ounce, after hitting a low since Dec. 14, 2018 at $14.48 an ounce.

Platinum dipped 1.6% to $831.75 per ounce, having hit a two month low at $826.95 earlier in the session.

Palladium was down 1% at $1,331.73 per ounce and has slumped more than 18% since the metal used in catalytic converters in car exhaust systems scaled a record peak of $1,620.53 in March.






This article appears in: Stocks , World Markets , Politics



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