Gold checked by stronger US dollar

The spot gold price edged lower during Asian trading hours on Wednesday as the US dollar continued to gain strength.

Spot gold was last at $1,319.10-1,319.50 per ounce, down $0.45 from Tuesday’s close. Trading ranged at $1,314.60-1,322.33 so far.

The US dollar index had started climbing since late last week before reaching a one-week high of 95.67 on Tuesday. It was last at 95.61, up 0.04 percent from its previous close.

“Yesterday, Brainard’s comments appeased fears of an imminent hike in September, but concerns of a rising belief within the Fed that the benefit of keeping monetary policy accommodative is waning appears have left markets uneasy,” Rodrigo Catril, a currency strategist at National Australia Bank, said in a report on Wednesday morning.

Federal Reserve governor Lael Brainard had warned on Monday that it would be a mistake to raise interest rates too quickly and advocated for “prudence in the removal of policy accommodation.”

Her comments represent a noticeable change in tone after various Fed members have in recent weeks outspokenly championed a near-term rate hike despite uneven US data and questions over the health of the global economy.

Market participants on Tuesday see the odds of a September rate increase at just 15 percent, and a 56.5 percent chance of a December hike, according to the CME Group FedWatch tool.

While gold is holding in high ground, profit-taking from stale speculative longs continues to create headwinds for gold in the short term, James Moore, a research analyst at FastMarkets, said.

“With Fed officials now in the blackout period ahead of next week’s FOMC meeting, direction will be largely data-dependant, although gold could still see downside pressure if the market prices in a surprise cut in pre-FOMC positioning,” he added.

In equities, the Dow Jones Industrial Average closed 1.4 percent lower at 18,066.75 on Tuesday. The Shanghai Composite slipped 0.33 percent to 3,013.52 so far on Wednesday.

In US data released Tuesday, the NFIB small business index for August came in at 94.4, below the predicted 94.9.

Key US data due for release later today includes import prices and crude oil inventories.

In other commodities, the Brent crude oil spot price rose 0.19 percent to $47.25 per barrel, while the Texas light sweet crude slipped 0.29 percent to $45.10 recently.

In other precious metals, silver was last at $18.85/18.87, down $0.02. Platinum was recently unchanged at $1,028/1,038, while palladium gained $3 to $650/658 recently on Wednesday.

On the Shanghai Futures Exchange, gold for December delivery was last unchanged at 285.05 yuan per gram, and the December silver was flat at 4,225 yuan per kilogram.

(Additional reporting by Dalton Barker)

The post Gold checked by stronger US dollar appeared first on The Bullion Desk.

from The Bullion Desk http://ift.tt/2cvfJ4E
via IFTTT