The spot gold price dipped to a fresh seven-week during Asian trading hours on Wednesday as the US dollar rose to a new two-month high.
Spot gold was last at $1,228-1,228.30 per ounce, up $0.90 from Tuesday’s close, after falling as low as $1,223.50 earlier in the day. Trading ranged at $1,223.50-1,230.30 so far.
The US dollar index climbed as high as 95.67 on Wednesday and was last at 95.61, unchanged from the previous day’s close.
Gold had broken several key support levels overnight due to the rising US dollar, alongside a burgeoning short-term negative undertone that had been building for several trading sessions, said MKS Group on Wednesday morning.
First support is the new low made this morning but a break through $1,220 could see the key $1,200-level tested, the broker said.
“Despite this short-term negative pullback, gold is still a strong 2016 performer against a range of alternative assets and these levels are an enticing entry price for long-term bulls,” it added.
The dollar rally has been partially fuelled by the hawkish Federal Open Market Committee (FOMC) April meeting minutes. A majority of policy-board members are growing more comfortable with a summer interest rate hike after the global equity calamity at the beginning of the year subsided.
Market participants currently see a 38-percent chance of a June rise, with 60 percent expecting it in July, according to CME Group FedWatch.
Throughout the week, investors will be observing various Fed official speeches, but the greater focus will be on Fed chair Janet Yellen, who is scheduled to appear at Harvard on Friday, along with former chairman Ben Bernanke.
In US data released Tuesday, new home sales for April came in at 619,000, above the forecast of 521,000. The Richmond manufacturing index for May stood at -1, a stark divergence from the 9 figure that was estimated.
Other US data due later on Wednesday includes goods trade balance, HPI, flash services PMI and crude oil inventories.
In commodities, the Brent crude oil spot price was last at $49.15 per barrel, up 0.29 percent, and the Texas Light Sweet Crude increased 0.08 percent to $49.23 so far on Wednesday.
Crude oil prices are seeing support as weekly US crude oil inventories data due later are expected to have fallen 1.7 million barrels last week, as opposed to a 1.3 million-barrel gain the previous week.
In equities, the Shanghai Composite rose 0.3 percent to 2,830.00 recently on Wednesday.
In other precious metals, silver rose $0.045 to $16.23/$16.25, but not before dipping to a new five-week low of $16.168 earlier on Wednesday.
Platinum was up $5 to $1,000/1,005 after slipping to a five-week low of $997 overnight, while palladium rose $2 to $530/535 recently on Wednesday after falling to a fresh 12-week low of $529 on Wednesday.
Similar to other metals, the shift in US monetary policy has also hurt the price sentiment for silver and PGMS.
Profit-taking selling for silver is expected to continue for a while longer, while palladium prices are correcting after the strong gains, said William Adams, head of research at FastMarkets.
“With stale disinvestment emerging and net length among Nymex speculators elevated, platinum remains vulnerable to further pressure in the short-term,” added James Moore, research analyst at FastMarkets.
On the Shanghai Futures Exchange, gold for December delivery was unchanged at 260.95 yuan per gram and December silver was flat at 3,626 yuan per kilogram.
(Additional reporting by Dalton Barker)
The post Gold dips to fresh 7-week low; silver, PGMS at multi-week lows appeared first on The Bullion Desk.
Read More
Source: Bullion Desk News
