Gold edges up as US rate hike view grounds dollar
Gold prices rose on the back of a subdued dollar on Monday as investors considered the prospects of slower interest rate hikes in the United States.
Spot gold rose 0.3 per cent to $1,321.20 per ounce at 0045 GMT, after marking the highest since April 26 at $1,325.96 in the previous session. US gold futures for June delivery were up about 0.1 percent at $1,321.50 per ounce.
The dollar index eased 0.1 per cent at 92.426, with its recent rally running out of steam on the back of sagging US yields as investors wound back expectations that the Federal Reserve will launch a series of quick rate hikes.
US import prices rose less than expected in April as a rebound in the cost of petroleum products was tempered by a drop in food prices, the latest indication that inflation pressures were increasing moderately.
St. Louis Federal Reserve Bank President James Bullard had on Friday spelled out the case against any further interest rate increases, saying rates may already have reached a “neutral” level that is no longer stimulating the economy.
The euro zone needs a new, common “fiscal instrument” to hold its member countries together even when they come under attack in financial markets, European Central Bank President Mario Draghi had said on Friday.
China’s central bank will maintain its neutral monetary policy and keep liquidity and credit growth largely steady while keeping the yuan currency basically stable, it had said on Friday.
The United States had threatened on Sunday to impose sanctions on European companies that do business with Iran, as the remaining participants in the Iran nuclear accord stiffened their resolve to keep that agreement operational.
US Secretary of State Mike Pompeo had said on Sunday that Washington would agree to lift sanctions on North Korea if the country agrees to completely dismantle its nuclear weapons programme, a move that would create economic prosperity that “will rival” that of South Korea.
SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.62 per cent to 857.64 tonnes on Friday from 862.95 tonnes on Thursday. Hedge funds and money managers raised their net long position in COMEX gold contracts in the week to May 8, US Commodity Futures Trading Commission (CFTC) data showed on Friday.
Source: Reuters
