Featured # Markets | 3 years ago

The Dollar Retreats, Gold Gains Ground

Recovering from its biggest loss since mid-arch, Gold rose 1 percent at the close of the morning trade. Stock markets eased after soft data from China, boosting interest in Gold as an alternative asset. The dollar also weakened against the euro. Spot gold was up 1 percent to $1,286.01 an ounce, while U.S. gold futures for June were up $15.20 at $1,287.90 an ounce. The metal ended the previous week down 1.2 percent after a sharp midweek fall, though it rebounded 0.8 percent on Friday.

The metal is supported by “sluggish stock markets, the U.S. dollar not really doing anything worthwhile, (and) the negative interest rate environment,” stated Afshin Nabavi, MKS’s head of training. “$1,285-$1,303 is an upside range in gold, but I like it here.” European shares fell into subdued trade earlier this morning. Data from China was less rosy, with April’s retail sales, factory output, and fixed-asset investments all falling just short of forecasts by official economists.

After data showed the New York Federal Reserve’s Empire State index fall to its lowest since February, the dollar extended losses again the euro. Gold has spiked 20 percent this year after tough global economic data tempered expectations of a term increase in U.S. interest rates. That of which would lift the opportunity cost of holding non-yielding gold. Silver, among other precious metals, increased by 1.5 percent at $17.36 an ounce, while platinum rose 1.2 percent at $1,059.78 and palladium rose 0.3 percent at $590.47 an ounce.

As the industry gather in London for Platinum Week, Johnson Matthey quoted that the platinum market deficit was due to grow in 2016, as demand from autocatalyst manufacturers is aided by the implementation of the new Euro 6 legislation. Metals Focus forecasted platinum’s slide to seven-year lows in January. This marked the end of the 18-month bear cycle that saw the metal nearly halve in value. The palladium market shows to need there years to consume its opaque above-ground stocks, according the Russian producer Norilsk Nickel.


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