Latest gold and currency rates in UAE today: Gold near 3-week low
Gold was near its lowest in three weeks on Thursday as robust economic data made an increase in US interest rates look more likely and signs emerged of progress in the Greek debt crisis.
Spot gold slipped 0.1 per cent to $1,183.25 an ounce by 0338 GMT (7.38am UAE time) after losing 0.7 per cent in the previous session. The metal touched $1,179.43 on Wednesday, its lowest since May 11.
Data on Wednesday showed the US trade deficit narrowed in April, while companies picked up their hiring in May after a pullback the previous month.
The economy looks to have recovered somewhat from a first-quarter contraction and that bolstered expectations the Federal Reserve could raise interest rates later this year.
“Our outlook for the gold price remains bearish,” Societe Generale analyst Robin Bhar said. “As US economic growth is expected to strengthen over the summer, a rate hike should become imminent by September.”
Higher rates would dent demand for non-interest-paying gold, while boosting the dollar.
Investors are now waiting for US weekly jobless claims data later in the day and a nonfarm payrolls report on Friday for more clues about the economy.
Safe-haven support for gold from the Greek debt crisis also weakened on signs that Athens could be inching closer to a deal with its creditors.
Greek Prime Minister Alexis Tsipras emerged from late-night talks with senior EU officials in Brussels saying a deal with creditors was “within sight” and that Athens would make a payment due to the IMF on Friday.
Failure to reach agreement this month could trigger a Greek default and lead to the imposition of capital controls and a potential exit from the euro zone, which could push investors to seek safety in bullion.
Charts were also not looking good for gold, with prices expected to revisit their May 1 low of $1,170.20, according to Reuters technical analyst Wang Tao.
Gold wasn’t getting much support from the physical markets, either.
A tight price range and expectations of more declines, in a seasonally quiet period for bullion, kept consumers away from gold jewellery, bars and coins.
Premiums in China, the top consumer of bullion in the first quarter, have barely moved in the past few weeks from $1.50-$2 an ounce to the global benchmark. In India, prices have been broadly on a par with global prices. (Reuters).