Gold Prices Struggle Near 6-Month Lows
Gold futures on Thursday struggled for direction after sliding to six-month lows in the previous session, with a strengthened dollar and subdued demand amid holidays in China weighing on the metal.
Prices of gold futures for delivery in April slipped $1.10, or 0.1%, to $1,644 an ounce in Asian-afternoon hours.
The futures, which had declined $4.50 in the regular session on the Comex division of the New York Mercantile Exchange overnight, stayed in a range from $1.641.70 to $1,646.40. The precious metal has dropped about 1.9% thus far in 2013.
March futures for silver , meanwhile, eased 0.2% to $30.81, also continuing a weak recent trend. Silver has dropped about 1.7% so far this month.
The weakness has come amid the Lunar New Year holidays in China this week, a period of family get-togethers on the mainland when demand for physical gold tends to decline. Weak demand has also persisted despite a bullish outlook from analysts, including at HSBC.
“Gold may be supported by concerns over the upcoming automatic spending cuts set to begin” on March 1 in the U.S., said James Steel, a bullion analyst at HSBC. “Gold is likely to benefit from tensions stemming from the ongoing currency war, we believe,” he added.
Steel was referring to an HSBC house view that the number of participants engaging in foreign-exchange “activism is rising,” which in turn pointed to policies from countries including Japan and Switzerland to try to ease the strengthening of their respective currencies.
A stronger currency tends to hurt a country’s exports, making them more expensive for buyers elsewhere.
Thursday in Asia, the Bank of Japan left its policy interest rate and the size of its asset-purchase program unchanged.
Accommodative monetary policies usually tend to support gold prices as they are aimed at spurring economic growth and inflation.
The ICE dollar index , which measures the greenback’s moves against a basket of six major global currencies, climbed to 80.248 from 80.082 in North America late on Wednesday.
Elsewhere in the metals complex, March futures for copper inched up 0.1% to $3.75 a pound and palladium for delivery in the same month fell 0.3% to $770 an ounce.
April platinum futures gave up 0.1% to $1,728.60 an ounce.
Marketwatch
