PRECIOUS-Gold claws way back into the black after Trump sacks Tillerson

PRECIOUS-Gold claws way back into the black after Trump sacks Tillerson

Reuters  | Mar 13, 2018 23:26

PRECIOUS-Gold claws way back into the black after Trump sacks Tillerson

* Spot gold to fall further towards $1,300/oz -analyst

* Trump fires Secretary of State Tillerson (Updates prices; adds comment, NEW YORK to dateline, additional byline)

By Renita D. Young and Eric Onstad

NEW YORK/LONDON, March 13 (Reuters) - Gold prices turned positive on Tuesday as the U.S. dollar lost ground after news that U.S. President Donald Trump replaced Secretary of State Rex Tillerson, while U.S. inflation data was in line with forecasts.

Spot gold XAU= was up 0.3 percent at $1,326.49 an ounce by 1:42 p.m. EDT (1742 GMT), while U.S. gold futures GCcv1 for April delivery settled up 0.5 percent at $1,327.10.

Trump fired Tillerson after a series of public rifts over policy on North Korea, Russia and Iran, replacing him with loyalist Central Intelligence Agency Director Mike Pompeo. dollar is lower and gold is higher off the Tillerson news. We've been seeing this pattern (of gold following the dollar) because there's no other strong factor leading to buying gold now," said Bill O'Neill, co-founder of Logic Advisors.

The U.S. dollar index .DXY relinquished its gains and fell against a basket of currencies, making commodities priced in the greenback cheaper for buyers using other currencies.

Also weighing on the dollar was news that U.S. consumer prices cooled in February, the latest indication that an expected pick-up in inflation is likely to be only gradual. investors had been worried stronger-than-expected CPI data could stoke expectations that the U.S. Federal Reserve will raise interest rates four times rather than three this year.

Higher interest rates typically make gold less attractive since it does not bear interest.

"Overall the outlook is not looking that great in the short term. I still expect prices to go towards $1,300, said Georgette Boele, ABN AMRO (AS:ABNd) commodity strategist.

Markets are looking to the next Fed meeting for direction on the pace of U.S. interest rate hikes this year.

"As we approach next week's FOMC day, we should see gold come under pressure as it struggles to compete against interest-bearing assets," said Daniel Ghali, commodities strategist at TD Securities.

Silver XAG= rose 0.6 percent at $16.59 an ounce.

Platinum XPT= was up 0.4 percent at $966.60 an ounce, near a one-week high of $970.90. Palladium XPD= climbed 1.7 percent to $995.30 per ounce, after touching a one-week high of $997.40.

The platinum price will struggle to move back above palladium, ING analyst Oliver Nugent said in a note.

"Based on our own forecasts, we don't think such a move will happen for the next few years due to platinum's weaker fundamentals with the palladium backwardation actually making it more expensive for investors to short the ratio."

The platinum/palladium ratio increased from late February. Palladium flipped to a premium over platinum last September for the first time since 2001.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (Canada) English (Australia) English (South Africa) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes