The gold price fell to a week’s low during Asian trading hours on Thursday as the US dollar rose amid improved risk sentiment.
Spot gold was last at $1,232.20-1,232.60 per ounce on Thursday, down $9.10 from Wednesday’s close after dipping to a week’s low of $1,229 earlier in the day. Trading ranged at $1,229-1,242.40 so far.
Improved Chinese data appears to have set a better tone for risk sentiment, said the Bank of New Zealand on Thursday morning.
Data released on Wednesday showed China’s total exports rising 18.7 percent year-on-year and imports falling 1.7 percent year-on-year in March in yuan-denominated terms – the March figures have improved from a 20.6-percent decline for exports and eight-percent drop for imports in February.
The US dollar continued to gain strength as it rose to a week’s high of 95.02 on Thursday in the risk-on environment. It was last at 94.95, up 0.2 percent from Wednesday’s close.
Base metals on the London Metal Exchange hit multi-week highs on Wednesday – with zinc rising to its highest since August 2015 at one stage.
Global equity markets also received a boost, with the Dow Jones Industrial Average closing 1.06 percent higher at 17,908.28 on Wednesday. The Shanghai Composite was last at 3,075.538, up 0.29 percent on Thursday after finishing 1.42 percent higher on Wednesday.
“The dollar has been weak recently but it is attempting a rebound, which seems to be causing a headwind for gold,” said William Adams, head of research at FastMarkets.
“We are, however, bullish given the revival in investor demand (and what is driving that) and we expect there will be considerable pent-up demand for physical gold into price dips,” he added.
While markets were in risk-on mode, the International Monetary Fund sounded warnings in its semi-annual financial stability report on Wednesday that risks to global financial stability are rising as growth slows and commodity prices fall.
The IMF said policymakers need to deliver additional measures to create a more balanced and potent mix of policies to reduce risks and support growth. If not, market turmoil could recur and intensify, and could create a pernicious feedback loop of fragile confidence, weaker growth, tighter financial conditions, and rising debt burdens. This could tip the global economy into economic and financial stagnation, it said.
On Tuesday, the IMF had cut its growth forecast for 2016, citing an extended period of slow growth that has made the global economy vulnerable to further instability.
It now sees the global economy expanding at a rate of 3.2 percent this year, down from its previous forecast of 3.4 percent, it said in a quarterly update.
In other commodities, crude oil prices inched lower after Saudi Arabia’s oil minister ruled out a production cut, while US data showed crude stockpiles rising last week by 6.6 million barrels, which was higher than expectations of a 900,000-barrel increase.
The Brent crude spot price was last at $43.53 per barrel, down 0.85 percent and the Texas light sweet crude dipped 1.13 percent to $41.15 so far on Thursday.
In US data released Wednesday, core retail rales and retail sales in March both unexpectedly disappointed coming in at 0.2 percent and -0.3 respectively – the forecasts called for gains of 0.4 percent and 0.1 percent.
PPI month-over-month in March stood at -0.1 percent, off the estimate of 0.3 percent gain, while core PPI – excluding energy and food components – over the same period slipped to -0.1 percent, missing the consensus of a 0.1 percent uptick.
Business inventories in February was in-line with projections at -0.1 percent.
US unemployment claims, CPI and core CPI are of note later on Thursday. Investors are also expected to focus on key Chinese data including GDP, industrial production, fixed asset investment and retail sales due Friday.
In other precious metals, silver fell $0.125 to $16.065/16.085 recently. Platinum decreased $8 to $986/991 and palladium dipped $2 to $536/542 so far on Thursday.
On the Shanghai Futures Exchange, gold for June delivery was unchanged at 257.65 yuan per gram and June silver was flat at 3,479 yuan per kilogram.
(Additional reporting by Dalton Barker)
The post Gold sinks to week’s low as US dollar gains in risk-on environment appeared first on The Bullion Desk.
Read More
Source: Bullion Desk News
