Gold slips as dollar regains its footing
Bengaluru — Gold slipped on Monday, as the dollar firmed after recent weakness.
The greenback and gold often move in opposite directions, as gold is priced in dollars and a stronger dollar makes it more expensive for holders of other currencies.³
Markets were awaiting comments by a top Federal Reserve official later on Monday for clues on whether recent strength can be sustained, after last week’s soft economic data.
Spot gold was down 0.1% at $1,252.21 an ounce at 1.27am GMT. US gold futures for August delivery fell 0.2% to $1,254/oz.
The dollar steadied against a basket of currencies early on Monday after slipping on the US economic data.
US homebuilding fell for a third straight month in May to the lowest level in eight months as construction activity declined broadly, suggesting that housing could be a drag on economic growth in the second quarter. Markets are now looking to comments by New York Fed president William Dudley for potential support for the greenback.
Dudley, a close ally of Fed chairwoman Janet Yellen, is due to take part in a roundtable with local business leaders in Plattsburgh, New York, on Monday.
Markets are also watching the UK, Brexit Secretary David Davis starts negotiations in Brussels on Monday that will set the terms on which Britain leaves the European Union and determine its relationship with the continent for generations to come.
Hedge funds and money managers reduced their net long positions in Comex gold and silver for the first time in four weeks, in the week to June 13, US Commodity Futures Trading Commission (CFTC) data showed on Friday.
Canadian exploration and mining firm Gold Reserve said on Friday it had received $40m from the government of Venezuela as part of a $1.03bn settlement arbitrated by the World Bank for the termination of its Las Brisas gold concession in 2009.
Asian gold demand ticked up last week as global prices came off seven-month highs, while Indian buyers stayed on the sidelines waiting for further price drops in the absence of fresh triggers to stoke purchases. In SA, Mineral Resources Minister Mosebenzi Zwane defended the terms of the new Mining Charter, which aim to accelerate black ownership in the industry, as a "win-win" situation for all, despite the Chamber of Mines threatening court action to block the changes.