Gold stabilized ahead of US data as a strong dollar resists safe haven demand

Gold prices struggled for momentum on Friday as a rally in the US dollar negated safe-haven demand caused by a lack of progress in peace talks between Russia and Ukraine, while investors awaited US jobs data that could provide clues about tightening policy.

Spot gold was flat at $1,937.55 an ounce, as of 0425 GMT, but was on track to end the week down more than 1%. And US gold futures fell 0.5% to $ 1944.20.

“Gold is unchanged in Asia, with no indications of safe haven buying over the weekend, another ominous sign, especially with the US dollar continuing to rise today,” said OANDA chief analyst Jeffrey Haley.

“Gold is still trapped in a range between $1,920 and $1,950, but its inability to rally with lower US dollar and yields this week is a concern and risks remain tilted to the downside.”

The dollar index moved higher from a nearly one-month low hit earlier in the week, making gold more expensive for other currency holders.

Yields on benchmark 10-year US Treasury bonds have fallen from three-year highs. Low yields reduce the opportunity cost of holding non-yielding gold.

Investors were looking to US jobs data for March, due later in the day, for wage inflation and indications of the US Federal Reserve’s monetary policy stance.

European buyers of Russian gas faced a deadline to start paying in rubles on Friday, while negotiations aimed at ending the five-week war were due to resume even as Ukraine braced for more attacks in the south and east.

The spot may test support at $1,924 an ounce, with a good chance of a breakout below that level and a drop towards $1,898, according to Reuters technical analyst Wang Tao.

Spot silver rose 0.2% to $24.82 an ounce.

Platinum rose 0.9 percent to $991.67, while palladium rose 0.9 percent to $2,282.94. However, both metals were on track for their fourth consecutive weekly loss.

(Reporting by Asha Cestla in Bengaluru; Editing by Sherry Jacob Phillips)

(The title and image for this report may have been reformulated only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)

Dear Reader,

Business Standard has always strived to provide the latest information and commentary on developments that matter to you and that have broader political and economic implications for the country and the world. Your continued encouragement and feedback on how we can improve our offerings has made our resolve and commitment to these ideals even stronger. Even during these challenging times brought about by Covid-19, we continue our commitment to keeping you updated with trusted news, authoritative opinions and insightful commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more, so we can continue to bring you more quality content. Our subscription form has seen an encouraging response from many of you, who have subscribed to our content online. Further subscribing to our online content can only help us achieve our goals of providing better and more relevant content. We believe in free, fair and credible journalism. Your support with more subscriptions can help us practice the journalism we are committed to.

Support quality press and Subscribe to Business Standard.

digital publisher

Leave a Reply

Your email address will not be published. Required fields are marked *