Gold extends fall as safe-haven buying slows … RTRS
Gold extends fall as safe-haven buying slows amid US rate hike view
* Gold hits lowest since Dec. 18
* Dollar index off 2-week lows
By Karen Rodrigues
Spot gold fell for a third straight session and wasdown 0.2 percent at $1,255.88 an ounce, as of 0408 GMT, afterhitting its lowest since mid-December at $1,253 earlier in
U.S. gold futures for August delivery were 0.2 percent lower at $1,257.50 per ounce.
“Gold does not seem to be benefiting from any risks relating to rising trade tensions, but is experiencing declines from a firmer dollar and any improvement in equity markets,” said JohnSharma, an economist at
National Australia Bank.
“It appears that investors are seeking safe havens in the U.S. treasuries and currencies such as the Japanese Yen. Near term, gold will remain under pressure.”
The dollar held steady against a basket of currencies, having gained 0.4 percent overnight to snap four sessions offalls to a two-week low.
However, it was down 0.2 percent at 109.90 against the yen, often sought in times of market turmoil and political tensions, after earlier touching 110.20.
A stronger dollar and higher U.S. interest rates reduce demand for non-interest bearing gold as the metal becomes more expensive for holders of other currencies.
The U.S. House of Representatives overwhelmingly passed a bill on Tuesday to tighten foreign investment rules, spurred by bipartisan concerns about Chinese bids to acquire sophisticated U.S. technology.
U.S. President Donald Trump endorsed Treasury Secretary Steven Mnuchin’s measured approach to restrict Chinese investments in U.S. technology companies.
The strong dollar and the prospect of a fourth rate hike have tempered gold prices, said Ronald Leung, chief dealer a tLee Cheong Gold Dealers in Hong Kong.
Dallas Federal Reserve Bank President Robert Kaplan said he believes the U.S. central bank’s monetary policy is still accommodative and suggested the Fed could raise rates at least two more times.
However, Atlanta Fed bank president Raphael Bostic said intensifying trade tensions over the last week have raised risks to the U.S. economy, adding that he may rule out a fourth rate increase for the year if
the trade war gets worse.
If the trade war continues, it will impact the global economy and could eventually push up gold prices, said Leung.
Meanwhile, silver fell 0.2 percent to $16.23 anounce.
Platinum declined 0.3 percent to $862.95 an ounce, while palladium was 0.6 percent higher at $962.10.
(Reporting by Karen Rodrigues in Bengaluru; editing by RichardPullin and Subhranshu Sahu)