Gold prices edged higher on Tuesday as the U.S. dollar slipped further, making bullion less expensive for holders of other currencies.
· The dollar index, which measures the greenback against a basket of currencies, was down 0.1 percent at 89.384, following a 0.4 percent fall on Monday.
Against the yen, the dollar was off its seven-week high of 107.78 yen touched on Friday as traders braced for a meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe starting on Tuesday.
· The United States accused Russia on Monday of blocking international inspectors from reaching the site of a suspected poison gas attack in Syria and said Russians or Syrians may have tampered with evidence on the ground.
· Trump has delayed imposing additional sanctions on Russia and is unlikely to approve them unless Moscow carries out a new cyber attack or some other provocation, a senior administration official said on Monday.
· Trump said on Monday he would nominate Richard Clarida as Federal Reserve Vice Chairman, adding another hawkish voice at the central bank.
· Gold consumption in China in the first three months of this year fell 5.44 percent to 284.97 tonnes from a year earlier, Chinese state television CCTV reported on Monday,citing data from the China Gold Association.
· Kazakhstan raised gold holdings by 3.1 tonnes to 310.1 tonnes in March, while Argentina lowered gold holdings by 6.8 tonnes to about 55 tonnes during the same period, International Monetary Fund data showed on Monday.
· Azerbaijan's top gold producer, Anglo Asian Mining, said on Monday it had increased its gold production by 49 percent year-on-year in the first quarter of 2018 to 16,479 ounces from 11,078 ounces in the same period last year.
· Gold prices marked time as ebbing geopolitical risk translated into firming risk appetite, boosting Fed rate hike bets while simultaneously undercutting support for the US Dollar. The latter effect seemed to reflect ebbing haven demand as well as the re-emergence of the view that broadening global recovery will see top central banks narrow the US central bank’s lead down the path to stimulus withdrawal. This put gold’s roles as anti-fiat and benchmark non-interest-bearing asset in conflict, translating into standstill.
· Meanwhile, gold may turn its attention to a steady stream of comments from Fed officials. Remarks from San Francisco branch president John Williams may prove most potent since he has been tapped to take over at the helm of the influential New York Fed after its Bill Dudley steps down. That will put Williams at the forefront of managing the mechanics of Fed tightening, including balance sheet reduction.
· Mr Williams has long emerged as an important bellwether for the consensus view on the rate-setting FOMC committee. His new role – due to be assumed in summer – will make his opinions all the more important. With that in mind, a somewhat hawkish tone might revive the greenback’s fortunes to the detriment of the yellow metal.
· Gold prices continue to stall below resistance in the 1353.87-57.50 area (double top, falling trend line). Breaking above it on a daily closing basis opens the door for a test of the July 2016 high at 1375.15. Alternatively, a move below near-term rising trend support – now at 1336.63 – exposes long-standing range support at 1307.25.
Reference: Reuters,DailyFX
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