Gold moves lower as the dollar and rates go higher

Daniel Fowler
March 20, 2018

USA gold futures for April delivery fell 0.1 percent to United States dollars 1,310.4 per ounce.

As economic indicators continue to point towards to accelerating USA growth, there is a risk that Fed Chair Jerome Powell signals a faster pace of hikes at his first meeting.

The most active gold contract for April delivery went up 5.5 dollars, or 0.42 percent, to close at 1,317.8 dollars per ounce.

Bengaluru- Gold was firm on Tuesday, having recovered from a more than two-week low hit in the previous session, as traders waited to gauge the path of United States monetary policy for the rest of the year from the two-day Federal Reserve meeting that kicks off later in the day. The OCR is expected to remain on hold at 1.75 per cent, with the bottom line likely to remain unchanged: "'Monetary policy will remain accommodative for a considerable period, '" said Westpac Banking Corp in a note.

Mr Weston said a key level for the NZ dollar is the 200-day moving average of around 71.80 USA cents and there will be keen interest to see whether the Fed now signals three more rate hikes this year and whether Mr Powell "comes across as hawkish or dovish".

Based on that, the market expects the central bank's board members to agree on a rate increase.

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And investors are eager to find out whether the Fed will speed up the pace of rate increases.

The caution also came against the backdrop of global trade war worries which are set to dominated a two-day G20 meeting starting later in Argentina and there were plenty of idiosyncratic factors in play too.

While speculators have pulled back from USA futures in both gold and silver, investors in exchange-traded funds have regarded the low prices as a buying opportunity, Commerzbank said.

22k gold is priced at Dh149.25 in Dubai.

. "I think the euro "longs" have good reason to be nervous", he said referring to those betting on a higher euro.

Technical support for gold was at its 100-day moving average of $1,305 an ounce.

Platinum was almost unchanged at $952.70 per ounce after hitting its lowest since January 3 on Monday. Palladium was 0.2 percent lower at $987.97 an ounce. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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