Strong dollar sends gold to two-week low
Bengaluru — Gold prices slipped to their lowest level in nearly two weeks on Monday as the dollar rose due to climbing US treasury yields and as global political concern eased.
Spot gold was down 0.1% at $1,333.71/oz% at 3.46am GMT, after earlier touching its lowest since April 10 at $1,331.70.
US gold futures fell 0.2% to $1,335.50/oz.
"Gold prices dropped back to the levels of around a week ago, with easing geopolitical tensions, the stronger dollar and gains in US rates affecting the market," ANZ analysts said in a note.
The dollar traded near a two-week high against a basket of major currencies on Monday, bolstered by rising US bond yields and as concerns eased over global political risks after North Korea said it would suspend nuclear and missile tests, scrap its nuclear test site and pursue economic growth and peace.
"We’re on another high for the year for dollar yields and it’s not boding well for gold," a Hong Kong-based trader said.
Yields on benchmark 10-year treasuries climbed to the highest level since Jan, 2014 on Friday. Higher US bond yields tend to boost the dollar and weigh on greenback-denominated gold.
The expectation that the Federal Reserve would raise interest rates three more times in 2018 after strong US data last week, was also supporting the dollar.
Gold has held its 50-day moving average around $1,332/oz, the trader said.
"But I think Europe will look for the bigger picture which is dollar strength and I think they’ll look to sell into this rally."
Speculators raised their net long positions in Comex gold by 5,382 contracts to 143,594 contracts in the week to April 17, US Commodity Futures Trading Commission data showed on Friday.
Spot gold might test support at $1,326/oz, following its failure to break resistance at $1,354, Reuters technical analyst Wang Tao said.
Among other precious metals, spot silver fell 0.4% to $17.04/oz.
Platinum was about 0.2% higher at $924/oz, while palladium rose nearly 0.3% to $1032.70/oz.