• Gold prices fell to the lowest in more than six weeks on Thursday, on expectations of further US interest rate increases this year and receding political uncertainty in Europe.
Spot gold was down 0.8% at $1,227.94 an ounce by 12.32am after touching $1,225.20, the lowest since 17 March, and extending losses below the 50- and 200-day moving averages.
• “The recent modest rise in US real yields and thereby also in the US dollar has resulted in downward pressure on gold prices. What is more, optimism about an EU-friendly election outcome in France has calmed investor’s nerves,” said ABN Amro analyst Georgette Boele. “As a result, investment assets that have safe haven characteristics, such as the yen and gold, have been sold off.”
• The focus is now shifting to Friday’s US non-farm payrolls report for April, which could reinforce expectations of higher US interest rates in June.
• “In the very near term we continue to expect that gold will trade moderately lower - our three-month target is $1,200/oz, as a number of bearish catalysts have yet to fully play out,” Goldman Sachs analysts said in a note.
Goldman said near-term downside risks for gold included more US rate increases than the market is expecting and the Fed starting to shrink its balance sheet on the back of possible US tax cuts and solid US and global economic growth.
• Silver was down 0.6% at $16.295, having hit a four-month low of $16.17. It has fallen around 13% since reaching a five-month high of $18.65 in mid-April
Reference: Reuters
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