Gold Prices Remain Steady Despite Dollar's Dash to Six-Month High
Published May 25, 2018 01:51PM ET
Investing.com – Gold prices oscillated around the psychologically important $1,300 level shrugging off dollar strength and easing geopolitical uncertainty following Trump’s reverse ferret on the North Korea summit.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange fell by $1.60 or 0.12%, to $1,302.80 a troy ounce.
Gold remained resilient in the wake of a resurgent dollar on the back of positive economic data as durable goods orders topped expectations reaffirming investor confidence in the U.S. economy.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose to a sixth-month high of 94.13.
Gold is sensitive to moves higher in the U.S. dollar – a stronger dollar makes gold more expensive for holders of foreign currency, thus, reduces investor demand for the precious metal.
The yellow metal also sidestepped easing U.S.-North Korea tensions after U.S. President Donald Trump said the meeting with North Korean counterpart Kim Jong Un could still proceed following conciliatory comments from North Korea overnight.
The yellow metal’s muted reaction to the sudden change in tone from Trump was somewhat surprising as it gained more than 1% on Thursday, when Trump cancelled the long-planned meeting with North Korea.
Falling bond yields kept a lid on losses in the yellow metal as the prospect of a fourth rate at the Fed’s December has plunged to under 30% from nearly 45% earlier in the week before the Federal Reserve’s dovish statement.
A fall in U.S. bond yields, limits the opportunity cost of holding non-yielding assets such as bullion.
In other precious metal trade, silver futures fell 0.82% to $16.55 a troy ounce, while platinum futures fell 1.38% to $900.00 an ounce.
Copper fell 0.65% to $3.076.
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Written By: Investing.com
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