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Jul 25, 2018

Gold Price at Close Report: Gold steadies near 1-year low as dollar slips I CNBC

Gold steadies near 1-year low as dollar slips


Gold ticked higher on Wednesday, but was still hovering near one-year lows as the dollar slipped, while hopes for a trade deal with Europe rose during meetings between European Commission President Jean-Claude Juncker and President Donald Trump.
Spot gold rose 0.71 percent to $1,232.88 per ounce. U.S. gold futures for August delivery settled up $6.30 at $1,231.80.
During a meeting Wednesday afternoon with Juncker, Trump said he hoped "to work something out on a fair trade deal with Europe."
Juncker visited the White House as trade relations between the EU and the U.S. have soured. The U.S. has slapped tariffs on European steel and aluminum imports, to which the EU has retaliated.
A deal would signal relief from strained trade tensions between the U.S. and EU over the past several months. Meanwhile, the members of the U.S. Senate introduced a bipartisan bill to delay auto tariffs. Earlier, the Washington Post reported that Trump was considering a 25 percent tariff on foreign-made cars.
The euro hit a session high against the dollar on the news.
"The dollar continuing to creep slightly lower has been helpful across the board in commodity demand," said David Meger director of metals trading at High Ridge Futures. "There's no (other) driving course, but adequate bargain hunting into these dips we've been seeing."
A sliding greenback makes dollar-denominated gold cheaper for holders of other currencies, which could potentially boost demand.
"There is scope for the dollar to ease a bit, which should provide support for gold, though an aggressive rally in the short term is unlikely. From a medium-term perspective we think this is a reasonable level to add length" buy, said Marcus Garvey, commodities strategist at ICBC Standard Bank.
ICBC expects the gold price to average $1,260 an ounce in the third quarter and $1,300 in the fourth quarter.
Rising investor interest in gold can be seen in the holdings of the largest gold-backed, exchange-traded fund, New York's SPDR Gold Trust, which are up more than 1 percent to 25.803 million ounces since July 18.
SPDR holdings have been trending down since April 30, partly due to higher U.S. interest rates, raising the cost of holding gold, which earns no income, interest or dividends and costs money to store and insure.
The U.S. central bank raised interest rates in June for the seventh time since December 2015. A Reuters poll found expectations for two more hikes this year.
"In the short term, upside should be limited as headwinds from the U.S. rate cycle persist," Julius Baer analysts said in a note. "With the dollar expected to eventually roll over and upside pressure to U.S. bond yields easing, medium- to longer-term buying opportunities should open up."
Silver gained 0.9 percent to $15.58, after reaching an eight-day high of $15.63.
Palladium jumped 2.02 percent to $933, after earlier hitting $936.60, a nine-day high, while platinum added 1.41 percent to $840.20.

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