• Gold prices steadied near one-and-a-half-week lows on Thursday, as a US equities rally offset support from the uncertainty over US government policies and a weaker dollar. Gold prices steadied near one-and-a-half-week lows on Thursday, as a US equities rally offset support from the uncertainty over US government policies and a weaker dollar.
• "The bullish impact of a weaker dollar was more than offset by a soaring US equity market where we saw the Dow take out the 20,000 mark for the first time," said INTL FCStone analyst Edward Meir.
"We suspect that gold could come under further pressure again on Thursday as the follow-through from the US stock rally reverberates through into other global markets," he added.
• The Dow closed atop the 20,000-mark for the first time overnight, boosted by solid earnings. Asian stocks gained on Thursday, led by the Wall Street rally. However, the currency markets focused more on Trump’s trade protectionism and the negative effect it could have on the dollar. The dollar index, which measures the greenback against a basket of currencies, fell 0.2% to 99.846.
• Spot gold may retest support at $1,197/oz, with a good chance of breaking below this level and falling towards the next support at $1,182, according to Reuters technical analyst Wang Tao.
• "Gold continues to find support from safe-haven buying amidst some near-term weakness in the US dollar," said ANZ senior commodity strategist Daniel Hynes.
• "Political uncertainty has intensified in early 2017, with Brexit and President Trump’s combative trade policies resulting in a fall in risk appetite."
• Gold hit two-month highs earlier in the week and has rallied about 7% since mid-December, fuelled by worry over Trump’s policies.
However, physical gold demand in India was weak due to higher prices, while Chinese demand ebbed ahead of the Lunar New Year holiday, traders said.
• Spot silver fell 0.4% to $16.91/oz. Platinum was firm at $978.10. Palladium rose 0.2% to $730.50, after falling more than 7% in the previous session to a near three-week low of $727.50.
"We have to suspect that heavy fund selling was a factor," said Meir of FCStone.
• "The market may also be getting nervous about the increasing trade tensions between the US and Mexico where a substantial amount of car production could be jeopardised by an increase in duties that will inevitably be passed on to consumers."
• The gold market continues to hold onto support above $1,200 an ounce; however, one international financial institution thinks it is only a matter of time before prices fall another $100.
In a report published Tuesday, the World Bank said that it sees the entire precious-metals complex falling 7% this year, with gold leading the way with a decline of 8%. Gold prices are seen averaging $1,150 an ounce in 2017. The global bank sees silver prices falling 4% to average the year around $16.50 an ounce.
“Downside risks to the forecast are stronger economic growth and faster-than-expected increases in U.S. interest rates. Upside risks include geopolitical tensions, stronger demand in China and India, delayed rates hikes, and mine supply shortfall,” the World Bank said in its report.
• Reference: Kitco,Reuters
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