Gold holds steady on safe-haven demand, weaker dollar

Posted on March 6, 2017 by Bob G. There have been 0 comments

By - Bob G.

* Spot gold may revisit low of $1,222.51/oz- technicals * Holdings of SPDR Gold Trust down 0.56 pct on Friday * Specs raise net longs in COMEX gold to highest in over 3 months (Updates prices, adds details, comments) By Arpan Varghese March 6 (Reuters) - Gold was little changed on Monday, supported by safe haven interest amid rising geopolitical tensions over North Korea and a weaker dollar. Investors are closely watching developments after the reclusive state fired four ballistic missiles into the sea off Japan's northwest coast, days after it promised retaliation over U.S.-South Korean military drills.

"There is still plenty of critical uncertainty supporting safe-haven buying and the news out of North Korea certainly has seen that side of the market quite active again," said ANZ analyst Daniel Hynes. Spot gold edged down 0.1 percent to $1,233.18 per ounce at 0611 GMT. The metal hit $1,222.51, the lowest since Feb. 15, in the previous session on signals of a hike in U.S. interest rates this month. U.S. gold futures rose 0.6 percent, to $1,233.2. The dollar slipped in Asian trading on Monday, as investors locked in gains after its rise last week on growing expectations of a U.S. interest rate hike.

The dollar index was down 0.1 percent to 101.46. U.S. Federal Reserve Chair Janet Yellen capped off a seemingly coordinated push from the central bank when she cemented the view that the Fed will raise rates at its next meeting on March 14-15, and likely be able to move faster after that than it has in years. "We are fairly neutral on the outlook for gold this week. Unless we see any unexpected commentary around that (interest rates) this week, that is pretty much built into the price now," Hynes said. Spot gold may revisit its March 3 low of $1,222.51 per ounce, as its drop from the Feb. 27 high of $1,263.80 has not completed, according to Reuters technical analyst Wang Tao.

Meanwhile, hedge funds and money managers boosted their net long position in COMEX gold to the highest in over three months in the week to Feb. 28, data showed on Friday. However, holdings of SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, fell 0.56 percent to 840.58 tonnes on Friday. "If you look purely at a fundamental standpoint, the funds are just playing the markets as they see it," said Spencer Campbell, general manager with Kaloti Precious Metals in Singapore. "The recent sentiment going into any discussion around interest rate movements is that they are just selling at the rallies." In other precious metals, spot silver fell 0.7 percent to $17.83 per ounce, while platinum inched lower by 0.2 percent, to $991.60. Palladium was up 0.5 percent at $775.40. The metal hit $752.72, the lowest since Feb. 6 in the previous session.



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