Deccan Chronicle

Gold eases on firmer dollar, eyes first weekly gain in four

Deccan Chronicle | DC Correspondent

Published on: May 11, 2018 | Updated on: May 11, 2018

Gold prices slipped in range-bound trading on Friday as the dollar firmed slightly.

Gold prices slipped in range-bound trading on Friday.

Gold prices slipped in range-bound trading on Friday.

Bengaluru: Gold prices slipped in range-bound trading on Friday as the dollar firmed slightly, with investors mostly brushing off a potential broadening of conflict in the Middle East.

Spot gold was down 0.1 per cent at USD 1,319.61 per ounce as of 0656 GMT, after rising to the highest since end-April at USD 1,322.76 in the previous session.

The metal was, however, still on track to register a first weekly rise in four. US gold futures for June delivery were nearly 0.2 percent lower at USD 1,320.20 per ounce.

"I think geopolitical concerns (with respect to recent attacks on Syria) are still a concern but investors aren’t paying significant attention to these," said Naeem Aslam, chief markets analyst, Think Markets.

"The dollar story is more prominent."

Israel said it attacked nearly all of Iran’s military infrastructure in Syria on Thursday, after Iranian forces fired rockets at Israeli-held territory for the first time in the most extensive military exchange ever between the two adversaries. Gold is traditionally seen as a safe place to park assets in times of uncertainty or conflict.

Meanwhile, the dollar index on Friday edged slightly higher, but still held below a 4-1/2-month high hit on Wednesday, with tepid US inflation data for April prompting traders to pare bets of faster rate hikes by the Federal Reserve.

Fed funds futures, however, rose on Thursday, indicating some traders continued to expect the US central bank to raise key interest rates at its next policy meeting in June. A stronger dollar makes gold more expensive for holders of other currencies, while higher US rates tend to boost the greenback.

Elsewhere, the Bank of England held its interest rates steady on Thursday, while European Central Bank Governing Council member Philip Lane said interest rates are unlikely to move dramatically in the coming years.

"Obviously we have to be cognizant to dollar risk but (tensions) in the Middle East doesn’t look like it’s going to settle anytime soon so I feel confident buying gold on the dips," said Stephen Innes, APAC trading head at OANDA said. Asian shares rose on Friday as risk appetite got a boost after U.S. President Donald Trump said he had hopes of "doing something very meaningful" to curtail North Korea’s nuclear ambitions at a summit in Singapore next month.

Among other precious metals, silver rose 0.1 per cent to USD 16.70 an ounce, having hit its highest in more than two weeks at USD 16.75 in the previous session.

Platinum fell 0.5 per cent at USD 919 per ounce, having hit its highest since April 25 at USD 927.20 on Thursday. Palladium was 0.5 per cent lower at USD 994 an ounce, having marked a more than two-week high at USD 1,002.10 in the previous session.

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