Tuesday, 2 April 2019

Gold hits three-week low as easing growth woes lift equities, dollar


Gold prices slipped to a more than three-week low on Tuesday as waning global economic slowdown concerns lifted the dollar and equity markets.

Spot gold was flat at $1,286.85 per ounce by 0332 GMT, after touching its lowest since March 8 at $1,285.80 earlier in the session.

U.S. gold futures were down about 0.2 percent at $1,291.30 an ounce.

"Concerns we saw emerge in the past few weeks around economic growth has certainly eased and that shift (in sentiment) in the past day or two resulted in little bit of selling in gold market," ANZ analyst Daniel Hynes said.

"Most of the global growth is coming from China and the (Chinese) data over the weekend eased those concerns."

Strong manufacturing data from the United States and China triggered a massive sell-off in the U.S. bond market, which in-turn lifted Asian equities to seven month highs.

The dollar index, which tracks the currency against key rivals, was trading close to a three-week high posted on Monday. A stronger dollar makes gold expensive for holders of other currencies.

Following an upbeat factory activity data from China released on Sunday, a private business survey on Monday showed that the economy's manufacturing sector unexpectedly returned to growth for the first time in four months in March.

This was followed by a better-than-expected U.S. manufacturing report which showed that activity rebounded a bit more than expected in March.

Indicating investor sentiment for bullion, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 1.5 percent on Monday, its biggest one-day percentage decline in a month.

On the technical front, $1,275 to $1,280 an ounce level remains the key longer-term support for gold, according to an OANDA note.

Among other precious metals, spot palladium was down 0.6 percent at $1,412.16 an ounce, after rising the most since late February in the previous session.

Silver was down 0.4 percent at $15.05 an ounce, while platinum rose 0.2 percent to $849.37 an ounce.

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Source: Moneycontrol

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