Friday, 13 March 2015 01:10
NEW YORK/LONDON: Gold steadied on Thursday as a retreat in the dollar from 12-year highs arrested its eight-session slide, though speculation that U.S. interest rates could rise sooner rather than later kept prices under pressure.
The dollar fell from a fresh high in early U.S. trading on Thursday after a surprise drop in U.S. retail sales in February.
Spot gold was up 0.05 percent at $ 1,154.65 an ounce at 2:23 p.m. EDT (1823 GMT), while U.S. gold futures for April delivery settled up $ 1.30 an ounce at $ 1,151.90. Earlier spot prices reached a high of $ 1,166.30 an ounce, but retreated as U.S. stocks climbed at the open.
Gold fell to its lowest since Dec. 1 on Wednesday at $ 1,147.10 an ounce in an eighth session of losses, its longest drop since March 2009.
Spot platinum hit its lowest in 5-1/2 years at $ 1,108.50 an ounce.
“Retail sales this morning were weaker than expected and have cast some doubt as to the timing of the Fed rate increase, which was perceived by many to be a June certainty just yesterday,” said Steve Scacalossi, director and head of sales for global metals at TD Securities in New York.
Simon Weeks, head of precious metals at the Bank of Nova Scotia, said: “It’s a foregone conclusion that rates are going to rise, it’s just a question of when, and by how much. As such, gold is going to struggle.”
Euro-denominated gold underperformed to fall 1.1 percent to a session low after reaching a one-month high at 1,103.91 euros an ounce. A sell-off in the euro paused, with the single currency rising against the dollar for the first time in two weeks.
The euro is down 12 percent against the dollar this year as monetary policy at the ECB and Federal Reserve diverges, with the ECB launching quantitative easing as the Fed prepares for its first rate rise in almost a decade.
“Future policy action by the Fed remains high on gold’s agenda,” BNP Paribas said in a note on Thursday. “It will continue to dictate the pace at which the U.S. dollar appreciates (and official sector demand for gold declines) and accordingly how much downward pressure will be exerted on gold.”
Silver was up 0.5 percent at $ 15.54 an ounce and spot palladium was up 0.1 percent at $ 787.70 an ounce. ($ 1 = 0.9431 euros)
Copyright Reuters, 2015
