Tuesday, August 16, 2022 8:25

Gold hit by Robust Dollar Rquities Ahead of Fed Minutes

Tagged with:
Posted by on Wednesday, May 20, 2015, 15:23
This news item was posted in Business category and has 0 Comments so far .

Gold struggled near its lowest in a week on Wednesday, holding steep overnight losses triggered by a stronger dollar and stock market, with traders now waiting for minutes of the Federal Reserve’s last policy meet for clues on the U.S. rate outlook.



Spot gold had ticked up 0.2 percent to $1,209.20 an ounce by 0023 GMT, but was firm near the week’s low of $1,205.39, reached on Tuesday. The metal lost 1.5 percent in the previous session, snapping a five-day rally.

Demand for bullion weakened as the dollar climbed to a two-week high against a basket of major currencies, with the euro tumbling on news the European Central Bank was looking to accelerate the pace of money printing to buy government bonds over the next two months.

ECB executive board member Benoit Coeure said the speed of the recent spike in bond yields was worrisome and that the ECB could “moderately” increase its buying in May and June so that it did not fall below its monthly buying target.

A stronger dollar makes gold more expensive for holders of other currencies, while also hurting its appeal as a hedge.

Also eating into safe-haven bids for gold were U.S. and European equities, which rose near record highs on Tuesday.

Separately, data on Tuesday showed U.S. housing starts jumped to their highest level in nearly 7-1/2 years in April and building permits soared.

The robust reading, after a string of disappointing data, stoked expectations the U.S. economy could be regaining momentum in the second quarter, and possibly prompt the Fed to soon hike interest rates.

Bullion had gained recently on hopes the Fed would delay a rate hike due to sluggishness in the economy.

Traders will be eyeing minutes of the Fed’s April meet, due to be released later today, to gauge the U.S. central bank’s outlook on the economy and the rate policy.

A drop in holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, to a four-month low of 718.24 tonnes on Monday also undermined investor appetite for gold.

In the physical markets, India could allow individuals to deposit a minimum of 30 grams of gold with banks in return for interest payments to help monetise large quantities of the metal lying with households, a step that is aimed at cutting expensive imports.

You can leave a response , or trackback from your own site .

No Responses to “Gold hit by Robust Dollar Rquities Ahead of Fed Minutes”

Leave a Reply