Gold falls as robust dollar and bond yields negate US-Iran worries

Ruben Fields
May 10, 2018

The New York Times reported that Trump had told French President Emmanuel Macron that he was going to pull out of the global agreement but the French presidency said the USA leader gave no indication of a decision on Iran.

The dollar's run-up stalled ahead of President Donald Trump's announcement that the United States was pulling out of the 2015 deal, which eased economic sanctions in exchange for Tehran limiting its nuclear program.

A US withdrawal from the deal, which eased economic sanctions in exchange for Tehran limiting its nuclear programme, would impact risk sentiment in the broader markets.

"If there is an announcement by the president that we're withdrawing from the Iran nuclear deal, people will wondering what impact that will have on oil prices", he said. "There might have been a bit of safe haven flows but overall it's to do with the US holding a favourable cyclical position". -China trade spat and North Korea, have helped shift investor focus back on dollar-supportive fundamentals over the past month.

The U.S. dollar bought 108.98 Japanese yen, lower than 109.08 Japanese yen of the previous session.

The Swiss franc, traditionally a safe-haven currency, fell 0.2% versus the dollar but gained 0.1% against the euro. The U.S. dollar was down to 1.0018 Swiss franc from 1.0028 Swiss franc, and it rose to 1.2957 Canadian dollars from 1.2869 Canadian dollars.

"The dollar is somewhat undervalued relative to the euro and the pound but it is very overvalued relative to the Japan yen".

Obama, world leaders slam Trump's withdrawal from Iran nuclear deal
They added: "The world is a safer place as a result". "That's why the United States negotiated the JCPOA in the first place". "In fact, the deal allowed Iran to continue enriching uranium and over time reach the brink of a nuclear breakout".

The euro EUR= declined 0.5 percent to $1.1860 after hitting $1.1836 earlier, its weakest level since late December, Reuters data showed. Platinum fell 0.2% to $910.20 an ounce and palladium added 0.3% to $971.97 an ounce.

The Dow Jones Industrial Average fell 73.68 points, or 0.3 percent, to 24,283.64.

Swedish inflation edged down to 1.9 percent on a year-over-year basis last month, just below the Riksbank's 2 percent goal.

Italian government bond yields jumped, lifting southern European peers, as the possibility of an early election increased with the largest anti-establishment parties polling strongly.

The slowdown in euro zone growth is not dramatic and the European Central Bank can still end its bond purchase scheme this year, ECB policymaker Vitas Vasiliauskas told German newspaper Boersen-Zeitung on Tuesday.

Thursday's USA consumer price index for April should show whether inflation is approaching the Fed's 2 percent goal.

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