Gold prices drop to six-month low on strong dollar, U.S. rate outlook
Spot gold fell 0.4 percent to $1,262.88 an ounce by 0637 GMT. It hit its lowest since Dec. 20 at $1,261.36 earlier, having lost about 3 percent over the last five sessions.
Gold prices posted a six-month low on Thursday, weighed down by a firm dollar and as the U.S. Federal Reserve Chair kept its outlook for higher interest rates.
Spot gold fell 0.4 percent to $1,262.88 an ounce by 0637 GMT. It hit its lowest since Dec. 20 at $1,261.36 earlier, having lost about 3 percent over the last five sessions.
U.S. gold futures for August delivery were down 0.8 percent at $1,264.50 per ounce.
"Precious metal (gold) is firmly in a downtrend and this is mainly due to the strength in the dollar index which is trading at a significant level," said ThinkMarkets chief market analyst Naeem Aslam.
The dollar held near an 11-month high against a basket of currencies on Thursday, supported by a rise in U.S. yields, while the pound was at its lowest level since November 2017 ahead of a Bank of England monetary policy decision.
A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.
The dollar strength follows a remark from Fed Chairman Jerome Powell yesterday and that is driving gold down, said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.
Powell on Wednesday said the U.S. jobs market did not appear overly tight and the Federal Reserve should continue with a gradual pace of interest rate rises to balance the bank`s employment and inflation goals in a strong economy.
Meanwhile, a developing trade war between the United States and China is weighing on business confidence and could force central banks to downgrade their outlooks, some of the world`s most powerful monetary policymakers said on Wednesday at a meeting in Portugal of central bank heads.
Gold prices, which can benefit in times of uncertainty, failed to gain so far this week, despite the ongoing trade war.
Spot gold may drop to $1,258 per ounce, as a support at $1,268 does not seem to hold, said Reuters technicals analyst Wang Tao.
WATCH THIS ZEE BUSINESS VIDEO HERE:
In other precious metals, silver fell 0.5 percent to $16.18 an ounce, having earlier touched its lowest since early May at $16.16.
Palladium was 0.3 percent lower at $961.47 per ounce. It hit $959 earlier in the session, its lowest since May 4. Platinum slid 0.9 percent to $857.49 an ounce. It touched $854.50, its lowest since Feb. 3, 2016, in the previous session.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
Power of Compounding: How many years it will take to reach Rs 2 crore corpus if your monthly SIP is Rs 3,000, Rs 4,000, or Rs 5,000
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
04:16 PM IST