0

0

0

0

0

0

0

0

0

This article is more than 3 year old.

Gold steadies as weak physical demand, higher US rates weigh

Mini

India's gold imports fell for a sixth month in June to 44 tonnes as a drop in the rupee lifted local prices to their highest in nearly 21 months, curtailing demand.

Gold steadies as weak physical demand, higher US rates weigh
Gold steadied on Monday as weak physical demand in top-consuming regions and the expectation of higher US interest rates weigh, despite the bullion-priced US dollar losing steam.
Spot gold lost 0.2% at $1,239.11 per ounce by 1:33 p.m. EDT (1733 GMT).
US gold futures for August delivery settled down $1.50, or 0.1%, at $1,239.70 per ounce.
A lower US currency makes dollar-denominated gold cheaper for holders of other currencies, which typically boosts bullion demand. However, low physical demand in top gold-consuming countries China and India and the continued expectation of the US Federal Reserve to raise interest rates pressured bullion, traders said.
"It seems the second quarter Chinese figures are putting a damper on the metals," said George Gero, managing director of RBC Wealth Management.
China's economy expanded at a slower pace in the second quarter as Beijing's efforts to contain debt hurt activity, while June factory output growth weakened to a two-year low.
India's gold imports fell for a sixth month in June to 44 tonnes as a drop in the rupee lifted local prices to their highest in nearly 21 months, curtailing demand.
"Indian and China retail consumption has been hindered by depreciating local FX," Citi analysts said in a note. "Investors may favor gold again, especially if trade friction rises further and becomes a more sizeable threat to economic growth and to the decade-long equity market bull run."
The U.S. dollar fell as investors pared back long bets on the greenback and rebalanced their positions ahead of Fed Chairman Jerome Powell's first congressional testimony on Tuesday. He is expected to reiterate the Fed's gradual monetary policy tightening.
Gold does not earn any interest or dividends and costs money to store and insure.
Meanwhile, holdings for the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust, have fallen more than 8% since late April to less than 26 million ounces, showing fading investor interest in bullion.
Silver lost 0.1% at $15.77 per ounce.
Platinum slipped 0.2% at $824.10 an ounce. Palladium declined 2.2% at $916.47 an ounce, earlier dipping to $914.75, its lowest since April 9.
Analysts expect palladium prices to remain supported.
"Our indicators suggest that palladium remains the tightest it has been in about 20 years -- and is expected to remain in deficit," Citi analysts said, adding they expect a palladium market deficit of 458,000 ounces this year and a 608,000 shortfall next year.
next story