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Gold steadies

LONDON. — Gold steadied yesterday after a surge in the dollar and US bond yields in the previous session had pushed prices down 1.7 percent to their lowest this year. Tuesday’s fall was the biggest since November 2016. Gold crashed below its technically important 200-day moving average and the psychologically significant $1,300 mark to $1,288.31, the weakest since December 28.

“Rising US bond yields and a stronger dollar were factors behind gold’s decline below the $1,300 level. The slight pick up (yesterday) suggests there might have been some opportunistic buying on the part of investors, said National Australia Bank economist John Sharma.

Spot gold was up 0,1 percent at $1,290.86 an ounce at 1104 GMT, while US gold futures for June delivery were flat at $1,290.30. A stronger dollar hurts gold by making it more expensive for holders of other currencies, while higher bond yields make non-yielding bullion less attractive to investors.

The dollar rose further yesterday to a new 2018 high, while yields on 10-year Treasuries slipped back from a 7-year peak. Yields and the dollar are likely to rise further, pushing gold to $1,275 by the end of June and $1,250 by year end, below the $1,310-$1,360 range it has inhabited since January, said ABN AMRO analyst Georgette Boele

“Gold held up for so long on such a high level. Now you are below $1,300 and the 200-day moving average, people who hold long positions are a little bit nervous,” she said.

Source :

The Herald

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