PRECIOUS-Gold prices gain as dollar loses ground after weak U.S. data
Markets await Fed’s March meeting minutes on Wednesday
* SPDR gold holdings drop for 6th straight session
* Platinum hovers below 10-month peak hit on Monday (Updates prices)
By K. Sathya Narayanan
April 9 Gold prices rose on Tuesday, hovering close to a more than one-week high touched in the previous session, as the dollar eased on weak U.S. economic data.Spot gold was up 0.2 percent at $1,299.34 per ounce, as of 0534 GMT, after touching its highest since March 28 at $1,303.61 in the previous session.U.S. GCv1 were up 0.1 percent at $1,303.20 an ounce.”The U.S. dollar is subdued and data shows that there is continued buying from central banks,” ANZ analyst Daniel Hynes said.
China, the world’s biggest gold consumer, raised its gold reserves by 0.6 percent to 60.62 million ounces by end-March, central bank data showed. also raised its gold holdings in March, according to data from the International Monetary Fund.The dollar sagged after weak U.S. economic data, making gold cheaper for investors holding other currencies. It posted its biggest daily percentage decline since March 20 in the previous session. USD/Orders for U.S.-made goods fell modestly in February and the manufacturing sector is slowing amid rising inventories, data showed on Monday. nonfarm payrolls data on Friday also signalled a slowdown in wage growth and job cuts in the manufacturing sector even as employment accelerated. gains in the last 24 hours were a follow-up on the jobs report from the U.S. on Friday,” said Ilya Spivak, a senior currency strategist at DailyFX.
“Decline in wage inflation takes the pressure off the Fed and lets it remain dovish and delay rate hikes and maybe switch gears, and that’s supportive for gold.”Lower interest rates reduce the opportunity cost of holding the non-yielding bullion and also weigh on the dollar, increasing gold’s appeal.Market participants are now awaiting minutes of the Federal Open Market Committee’s March meeting, due on Wednesday, while the European Central Bank meeting on the same day is also on investors’ radar.”There is an expectation for a dovish-biased statement based on what came out in March. The larger issue is how concerned are our policy makers over the state of global economy,” Spivak said.
The U.S. Federal Reserve last month abandoned projections for any interest rate hikes this year amid signs of an economic slowdown. holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust , fell for a sixth straight session to 760.49 tonnes on Monday. GOL/ETFAmong other precious metals, spot platinum slipped 0.3 percent to $902.56 per ounce, after touching its highest since end-May 2018 in the previous session.Palladium fell 0.6 percent to $1,375.70 an ounce, while silver was trading flat at $15.25 per ounce.
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