· Gold tends to gain on expectations of lower interest rates, as they reduce the opportunity cost of holding a non-yielding bullion and trims the demand for U.S. dollar, making the yellow metal less expensive for holders in other currencies.
Spot gold was up 0.4 percent at $1,291.97 per ounce, as of 0610 GMT.
U.S. gold futures were up 0.2 percent at $1,292.10 per ounce.
· The weakness in equities and U.S. dollar appear to be a bonding providing support for gold, said Michael McCarthy, chief strategist, CMC Markets and Stockbroking.
“There is a key resistance between $1,290 and $1,310. Gold will need to do substantial work to rise above this level as generally we see traders shorting into it.”
The U.S. central bank had the ability to be patient on monetary policy given stable price measures, U.S. Federal Reserve Chairman Jerome Powell said last week, and he downplayed predictions from policymakers suggesting interest rates would be raised twice more this year.
· “The market feels there is a shift in the Fed’s stance and it is more accommodative and we are seeing the dollar weakening for several sessions,” McCarthy said.
· Meanwhile, Asian shares tumbled on Monday after a shock contraction in Chinese December exports, which fell 4.4 percent from a year earlier, the biggest monthly drop in two years, official data showed on Monday.
Spot gold has gained over 11 percent since hitting a 1-1/2-year low in mid-August at $1,159.96 due to volatile stock markets and a weaker dollar.
· “The precious metals sectors continue to benefit from a weaker U.S. dollar and periodic weakness in equity markets,” ANZ said in a research note.
“The geopolitical risks have also started to induce some safe-haven buying. Investors are becoming increasingly worried about the Brexit negotiations. At the same time, there appears no end in sight for the U.S. government shutdown,” ANZ noted added.
A partial U.S. government shutdown over President Donald Trump’s demand for $5.7 billion to build a wall along the U.S.-Mexico border entered its 24th day on Monday, with no end in sight.
Spot gold remains neutral in a range of $1,279-$1,299 per ounce, and an escape could suggest a
· Gold formed an inside bar as it continued to consolidate gaining nearly $3 for the week where it swung $17 from highs to lows finally closing well above the support. The movement was data driven due to the volatility in dollar index caused mainly by American fundamentals. Even in such a week bullishness was the winning trend as the long term trendline was respected which is acting as a massive support. The week has this year’s first major fundamental event – “Brexit deal vote” which can sway the prices big time in either direction.
· Among other precious metals, palladium fell 0.8 percent to $1,306.99 an ounce. It hit a record high at $1,342.43 last week.
· Platinum slipped 0.2 percent to $809.20; while silver traded steady at $15.59 an ounce.
Reference: Reuters, Trading View
Thai
Eng