Gold rises to 1-week high as dollar pauses rally
by Admin |
Gold prices hit their highest in a week on Monday, buoyed as the dollar slipped after marking its strongest level this year in the previous session.
Spot gold had risen 0.3 percent to $1,318.46 per ounce by 0332 GMT, after earlier touching its highest since late-April at $1,318.85.
U.S. gold futures for June delivery were up 0.3 percent at $1,319.10 per ounce.
"The dollar is a little bit under pressure. The key driver still remains the dollar and that is what we see," said Dominic Schnider at UBS Wealth Management in Hong Kong.
The dollar index traded slightly below its 2018-peak early on Monday, after disappointing U.S. employment data for April and as concerns about trade frictions weighed on upward momentum.
Gold prices were also drawing support from political uncertainty surrounding markets, Schnider said, pointing to concurrent gains in the Japanese yen, which also tends to appreciate with higher uncertainty.
"The fact that the trade negotiations between the U.S. and China for some ended up on the disappointing side could have added a little bit of support for gold."
Meanwhile, ANZ analysts said in note that gold prices pushed higher as investors focused on the relatively benign level of wage growth in the United States.
Two Federal Reserve officials on Friday said they were keeping an open mind on the total number of interest rate rises needed this year.
U.S. interest rate futures rose modestly on Friday, as traders still expect the Fed to raise key borrowing costs at its June 12-13 policy meeting in the wake of weaker-than-forecast growth in domestic payrolls and wages in April.
Gold is highly-sensitive to rising U.S. rates as these tend to boost the dollar in which it is priced.
Spot gold may bounce more to resistance at $1,326 per ounce, according to Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.17 percent to 864.13 tons on Friday.
Hedge funds and money managers trimmed their net long positions in COMEX gold by 62,378 contracts to 51,985 contracts in the week to May 1, U.S. data showed on Friday.