Gold Dips In Asia As Dollar Posts Minor Rebound In Early Trade

Investing.com – Gold prices dipped in Asia on Monday with a mild rebound in the dollar prompting some physical selling.

for February delivery eased 0.31% at $1,347.90 on the Comex division of the New York Mercantile Exchange. The rose 0.18% to 89.03.

On Tuesday, the Federal Reserve meeting, the last under the leadership of Janet Yellen before she hands the chairmanship over to Jerome Powell, will be in focus as well as Friday’s U.S. jobs report for January and Wednesday’s euro zone inflation data.

Last week, the dollar index recorded its largest weekly decline since June, following comments by the U.S. Treasury secretary earlier in the week welcoming a weaker currency.

Last week, gold prices ended lower on Friday but remained in sight of the previous day’s 17-month peak as the U.S. dollar was pressured by data pointing to slower U.S. economic growth and comments by a senior U.S. official backing a weaker currency.

The dollar remained lower after data on Friday showing that the U.S. economy grew by an annualized 2.6% in the fourth quarter, rather than the 3% expected, down from 3.2% in the previous three months.

The greenback had already weakened broadly, falling to three year lows against a currency basket after US Treasury Secretary Steven Mnuchin said on Wednesday at Davos that a “weaker dollar is good for trade.”

The dollar found some support after President Donald Trump said Thursday the US currency would get “stronger,” appearing to contradict Mnuchin’s comments.

Trump added that he thought the remarks by his Treasury secretary had been taken out of context by investors.

A dollar-denominated commodity, gold becomes cheaper for overseas buyers when the US currency weakens.

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