banner

Screen Shot 2017-06-22 at 12.18.56 PM
526 Views

Gold rises as oil price slump boosts safe haven demand


BENGALURU – Gold prices rose for a second straight day on Thursday as risk averse sentiment amid weaker oil prices drove up the demand for the metal, with a softer dollar and weakness in US Treasury yields also lending support.

Spot gold rose 0.5% to $1 252.41/oz at 0812 GMT. It rose 0.3% in the previous session, its largest intraday percentage change since June 6.

US gold futures for August delivery rose 0.6% to $1 253.30/oz.

“A softer US dollar and a risk-off bias following the recent declines to crude saw gold turn higher during Asian hours on Thursday,” MKS PAMP trader Sam Laughlin said in a note.

Oil turned lower on Thursday after posting gains earlier in the session as traders look ready to test new lows for crude prices with worries persisting over a global glut. [O/R]

“The uncontrolled oil price spill in the futures markets may have seen some traders pushing the risk aversion button and buying gold,” said Jeffrey Halley, senior market analyst at Oanda.

“The primary driver appears to be the flattening of the longer-dated US Treasury curve.”

The US Treasury yield curve flattened to almost ten-year lows on Wednesday as investors evaluated the impact of hawkish Federal Reserve policy on the economy even as inflation measures are deteriorating.

US home resales unexpectedly rose in May to the third highest monthly level in a decade and a chronic inventory shortage pushed the median home price to an all-time high.

Gold is highly sensitive to rising rates and yields, which increase the opportunity cost of holding nonyielding assets such as bullion while boosting the dollar, in which it is priced.

“Investors are waiting for any clues on whether the timing of the next rate hike is September or December,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

Spot gold may bounce more into a range of $1 257 to $1 261/oz, as it has cleared a resistance at $1 251 according to Reuters technical analyst Wang Tao.

The US dollar index, which measures the greenback against a basket of six currencies, retreated from a one-month high of 97.871 set on Tuesday.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.04% to 853.98 tonnes on Wednesday.

Among other precious metals, silver gained 1% to $16.61/oz. Platinum touched its highest in a week during the session and was up 0.6% to $929.20/oz, while palladium slipped 0.8% to $880.99/oz.

Source: engineeringnews

Recently Published

Property-Buyer-Show-Gauteng-Banner-800x304
»

How to choose the best real estate agent when buying your first home

Buying your first home is a daunting process in itself, which is why ...

Screen Shot 2017-10-19 at 10.14.22 AM
»

Global water insecurity calls for water infrastructure maintenance

The growing funding gap to keep up with the rehabilitation, operation ...

Screen Shot 2017-10-19 at 10.02.53 AM
»

Regreening the planet could cut as much carbon as halting oil use – report

Natural solutions such as tree planting, protecting peatlands and ...

a2ginfrast
»

Johannesburg’s Executive Mayor Herman Mashaba to address African Real Estate & Infrastructure Summit in Sandton on 25 October

“Rejuvenation of the inner city a key priority for the new ...

ITC
»

Laminated timber beams to comply with regulations

The Institute for Timber Construction South Africa (ITC-SA), South ...

worms
»

Organic waste – What to do?

Have you ever felt frustrated with the food waste that you throw ...

greenbuilding
»

Meet the Green Building Convention 2017 keynote speakers

This year, we have included speed networking stations at the GBCSA ...

school
»

Streetlights Schools: Wellness In Education

In keeping with sustainable school design and child mental health ...

gproperties25
»

Growthpoint powers innovation with its NWU Solar Car team sponsorship

Pushing the boundaries of what is possible for alternative energy and ...