Gold languishes near one-year low

Bengaluru — Gold prices eased on Thursday, nearing a one-year low hit in the previous session, as the dollar firmed on the potential for further US interest rate hikes.

Spot gold was down 0.1% at $1,224.76/oz at 3.59am GMT. The metal slipped to its lowest since mid-July 2017 on Wednesday at $1,220.81/oz.

US gold futures for August delivery were 0.3% lower at $1,224.70/oz.

“Gold market is just following the US dollar, the dollar is strong so it’s pushing the market down,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

“The economy is still good and interest rate still up, so that’s good for the US dollar and negative for gold for the time being.”

The dollar held firm against the yen and other major currencies on Thursday, supported by bullish comments from the US Federal Reserve chairman, which affirmed the expectation about the central bank’s possible interest rate moves this year.

“Rallies continue to be well sold and it is difficult to see a break towards $1,236-$1,240 [for gold] with the current dollar strength,” MKS Pamp Group said in a note.

Fed chairman Jerome Powell in a closely watched two-day congressional testimony, said he believed the Us was on course for years more of steady growth, and carefully played down the risks to the US economy of an escalating trade conflict.

However, manufacturers in every one of the Federal Reserve’s 12 districts worried about the impact of tariffs, a Federal Reserve report said on Wednesday, even as the US economy continued to expand at a moderate to modest pace.

US President Donald Trump said on Wednesday that European leaders were coming to Washington next week to try to hammer out a deal focused largely on car tariffs, while his top economic adviser accused Chinese President Xi Jinping of holding up a US-China trade deal.

Spot gold has found a support zone of $1,220/oz-$1,226/oz. It might hover above this zone for one more day or bounce towards a resistance at $1,237, Reuters technical analyst Wang Tao said.

Among other precious metals, silver fell 0.2% at $15.50/oz.

Platinum was 0.5% lower at $809.75/oz and palladium was little changed at $907/oz.

Reuters