Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Bengaluru — Gold hit a nine-month low on Tuesday, as the US dollar at a 20-year high stifled demand for bullion, but a slight recovery in the euro against the greenback limited further losses.
Spot gold was up 0.1% at $1,734.97 an ounce at 2.29am GMT, after hitting its lowest since last September of $1,722.36 earlier in the session. US gold futures firmed 0.2% to $1,734.20.
“Gold looks like it is trading in direct correlation with EUR/USD in Asia,” finding some support as the euro recovered slightly, but if EUR/USD falls through 1.0000 in Asia, gold could drop towards $1,700, Oanda senior analyst Jeffrey Halley said.
The euro was near parity to the dollar amid concerns that an energy crisis could tip Europe into recession, while the US Federal Reserve continues to aggressively tighten policy to curb inflation. Strength in the dollar makes greenback-priced gold more expensive for buyers holding other currencies.
US consumer price index data, a measure of inflation, are due on Wednesday, and are expected to show prices rose 8.8% in June from a year earlier.
Recent inflation data have not been encouraging, Atlanta Fed president Raphael Bostic said on Monday, saying the lack of month-to-month improvement in the pace of price increases warrants another 0.75 percentage point increase in the federal funds rate when policymakers meet later this month.
Higher interest rates increase the opportunity cost of holding bullion, which yields no interest.
Benchmark US 10-year treasury yields eased, somewhat buoying demand for gold.
“Gold seems to have found a few friends near $1,730 over the last couple of days, without ever seriously looking like it would reverse its recent sell-off,” Halley said.
Spot silver rose 0.3% to $19.14 an ounce, platinum dipped 0.7% to $863.82, and palladium dropped 1% to $2,140.80.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold at a nine-month low on dollar strength
Bengaluru — Gold hit a nine-month low on Tuesday, as the US dollar at a 20-year high stifled demand for bullion, but a slight recovery in the euro against the greenback limited further losses.
Spot gold was up 0.1% at $1,734.97 an ounce at 2.29am GMT, after hitting its lowest since last September of $1,722.36 earlier in the session. US gold futures firmed 0.2% to $1,734.20.
“Gold looks like it is trading in direct correlation with EUR/USD in Asia,” finding some support as the euro recovered slightly, but if EUR/USD falls through 1.0000 in Asia, gold could drop towards $1,700, Oanda senior analyst Jeffrey Halley said.
The euro was near parity to the dollar amid concerns that an energy crisis could tip Europe into recession, while the US Federal Reserve continues to aggressively tighten policy to curb inflation. Strength in the dollar makes greenback-priced gold more expensive for buyers holding other currencies.
US consumer price index data, a measure of inflation, are due on Wednesday, and are expected to show prices rose 8.8% in June from a year earlier.
Recent inflation data have not been encouraging, Atlanta Fed president Raphael Bostic said on Monday, saying the lack of month-to-month improvement in the pace of price increases warrants another 0.75 percentage point increase in the federal funds rate when policymakers meet later this month.
Higher interest rates increase the opportunity cost of holding bullion, which yields no interest.
Benchmark US 10-year treasury yields eased, somewhat buoying demand for gold.
“Gold seems to have found a few friends near $1,730 over the last couple of days, without ever seriously looking like it would reverse its recent sell-off,” Halley said.
Spot silver rose 0.3% to $19.14 an ounce, platinum dipped 0.7% to $863.82, and palladium dropped 1% to $2,140.80.
Reuters
Asian stocks fall to lowest level in two years
Oil falls as new Covid curbs in China trim demand outlook
JSE faces Asian market pressure on Tuesday as investors eye US inflation
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Market data — July 11 2022
WATCH: Market Report
MARKET WRAP: JSE tracks global peers weaker, while rand breaches R17/$
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.