Quantcast

PRECIOUS-Gold prices wobble as investor risk sentiment improves


Shutterstock photo


* Spot gold may fall towards $1,264- analyst

* Silver hits 5-month low

* Palladium down 18% since scaling record peak in March (Updates prices)

May 17 (Reuters) - Gold prices marked time on Friday, afterseeing its biggest one-day percentage loss in a month in theprevious session, on a firmer dollar and increased investorappetite for riskier assets due to strong U.S. data andcorporate results.

Spot gold XAU= was mostly unchanged at $1,286.44 per ounceas of 0536 GMT.

U.S. gold futures GCcv1 were steady at $1,287.20 an ounce.

Spot gold fell 0.8% on Thursday, its biggest one-daypercentage decline in a month after risk sentiment improved.

"Markets are very much inclined towards the riskier assets.Investors are trying to price in breakthrough in (Sino-U.Strade) talks due to the conciliatory tone from both the camps,"said Benjamin Lu, an analyst with Singapore-based PhillipFutures.

Strong corporate earnings have also boosted equities and thedollar, pressuring gold, he said.

U.S. stock indexes extended gains on upbeat earnings as wellas robust economic data that underlined the strength of thedomestic economy. Meanwhile, the dollar index .DXY hit atwo-week high against a basket of currencies. .NUSD/

The U.S. housing data showed homebuilding increased morethan expected in April, while unemployment benefits fell morethan expected last week, pointing to sustained labour marketstrength that should underpin the economy. urn:newsml:reuters.com:*:nL2N22R1F7

"We still see broad strength in the overall global economy,which is currently benefiting from more fiscal and monetarystimulus," Fitch Solutions said in a note, adding that thislimits a significant gold price appreciation in 2019.

The pullback in risk aversion lifted treasury yields. Therise in yields underpinned the U.S. dollar. MKTS/GLOB

A stronger dollar makes gold more expensive for holders ofnon-U.S. currency.

Early in the week, spot gold prices rose 1.1%, registeringtheir best one-day percentage gain in nearly three months afterChina announced that it would impose retaliatory tariffs on arange of U.S. goods. urn:newsml:reuters.com:*:nL2N22P0A6

Even though trade worries have taken a backseat, investors are still wary of possible tensions emanating from a U.S. bid toblock China'sHuawei TechnologiesHWT.UL from buying vitalAmerican technology. urn:newsml:reuters.com:*:nL2N22S0RC

Meanwhile, Thursday's fall in gold prices have worsened thetechnical picture for the metal.

Spot gold may break a support at $1,283 per ounce, and falltowards the next support at $1,264, according to Reuterstechnical analyst Wang Tao. urn:newsml:reuters.com:*:nL4N22T123

Among other metals, silver XAG= was down 0.2% at $14.52and ounce, after hitting a low since Dec. 14, 2018 at $14.46 anounce.

Platinum XPT= dipped 0.6% to $824.95 per ounce, having hita two-month low at $823.50 earlier in the session.

Palladium XPD= was down 0.5% at $1,323.57 per ounce andhas slumped more than 18% since the metal used in catalyticconverters in car exhaust systems scaled a record peak of$1,620.53 in March. (Reporting by Nallur Sethuraman in Bengaluru; editing byUttaresh.V) ((Sethuraman.NR@thomsonreuters.com; (Within U.S.1-651-848-5832, Outside U.S. +91 8067496031); Reuters Messaging:nallur.sethuraman.thomsonreuters.com@reuters.net))






This article appears in: Stocks , World Markets , Politics




More from Reuters

Subscribe






See Reuters News













Research Brokers before you trade

Want to trade FX?