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SINGAPORE — Gold retained overnight gains yesterday, as a softer dollar increased the metal’s appeal as a hedge, with investors waiting for stronger clues on when the US Federal Reserve will raise US rates.
Spot gold was little changed at $1 174,90 an ounce by 6.43am GMT.
The metal gained 0,5 percent in the previous session, snapping a three-day losing streak. Bullion gained as the euro rose against the dollar on Tuesday, bolstered by solid regional economic data and comments from European Central Bank (ECB) officials suggesting further monetary easing may not be imminent.
A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies, while also increasing its appeal as a hedge. Sluggishness in equity markets also triggered some safe-haven bids for gold.
With gold now close to its 200-day moving average near $1,175, some expect more gains, though trading could be quiet ahead of the ECB policy meeting today and Fed meeting next week.
Bullion’s rise above its 200-day moving-average “is a technical sign, no doubt, suggesting some upside risk for gold,” said OCBC analyst Barnabas Gan.
“(But) a potential higher interest rate environment, better growth story into 2016, are strong fundamental drivers underpinning a bear gold story going forward,” Gan said.—Reuters.
Bongani Ndlovu