Bengaluru — After gaining more than 8% in 2016, gold
extended its strong run into the New Year, pushed higher in 2017’s first
day of trading on Tuesday by technical buying, despite pressure from a
strong dollar.
At 3.44am GMT, spot gold was up 0.4% at $1,156.75 per ounce, while US gold futures rose 0.5% to $1,157.20.
"A technical rebound is just under way," said Jiang Shu, chief
analyst at Shandong Gold Group, after gold slipped in December when
solid US economic data gave the Federal Reserve confidence to raise
rates for the first time in a year.
Gold is highly sensitive to rising rates, which lift the opportunity
cost of holding non-yielding assets such as bullion, while boosting the
dollar, in which it is priced.
"The market is waiting for (US) non-farm payrolls data due this
Friday. If we have lower-than-expected data, it is a good chance for
gold to have a strong rebound," Shu said.
But looking further ahead, Shu expects US interest rate hikes this
year to pressure gold. "Any rise in the first quarter will be a
medium-term technical rebound and not a fundamentally driven long trend
rally," Shu said.
The most active COMEX gold futures contract finished 2016 up 7.1% as
compared to the end of 2015. The dollar index — which measures the
greenback against six major rivals — climbed over half a percent.
On Tuesday, the US dollar held on to broad gains, resuming its ascent
after last week’s brief wobble as the prospect of rising US interest
rates this year kept sentiment bullish.
Asian stocks began 2017 on a flat note on Tuesday, uninspired by a
surge in European markets to their highest in more than a year, while
the dollar resumed its climb after last week’s stumble.
Hedge funds and money managers slashed their net long positions in
COMEX gold to a near 11-month low and trimmed bullish bets in silver
contracts in the week to December 27.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded
fund, said its holdings fell 0.14% to 822.17 tonnes on Friday from
Thursday.
In other precious metals news, spot silver rose 0.7% to $16.04 per ounce.
Platinum was up over 1% to $911.40, while palladium rose 0.7% to $683.10.
Reuters/BDlive
No comments:
Post a Comment