khaleejtimes, Thursday, May 18, 2017 | Shaaban 22, 1438
Gold prices firm up, Dubai gold touches Dh149.25
Gold prices inched up on Monday as weaker-than-expected economic data from the
US and a missile test by North Korea over the weekend pressured the dollar.
22k gold was priced at Dh140 today, while 24k touched Dh149.25.
Spot gold was up 0.1 at $1,229.81 per ounce at 0321 GMT. The yellow metal rose
about 0.3 percent on Friday. US gold futures were up 0.2 percent at $1,229.90 an
North Korea said on Monday it had successfully conducted a newly developed
mid-to-long range missile test on Sunday, supervised by leader Kim Jong Un and
aimed at verifying the capability to carry a "large scale heavy nuclear
"It (North Korea's missile test) is underpinning support for gold but at the
moment its obviously not escalated to the point where investors are becoming
overly worried about," said ANZ analyst Daniel Hynes.
"It (North Korea-US relations) has been an issue for some time. Throwing in
Trump into the mix sends a bit of ambiguity into the market. So subsequently
(investors are) a bit more cautious about the outcome than they have been in the
US data on Friday showed a smaller-than-expected 0.4 percent increase in April
retail sales from the previous month, while a disappointing report on consumer
prices raised concerns about the retail sector and the broader economy.
"The data just reaffirms the view that we are only going to see two additional
(US) rate hikes this year and certainly nothing more, that provides some
additional support," Hynes said.
Gold is highly sensitive to rising rates, which lift the opportunity cost of
holding non-yielding assets such as bullion, while boosting the dollar, in which
it is priced.
Spot gold may end its current bounce in a narrow range of $1,229-$1,236.60 per
ounce, and then revisit its May 9 low of $1,214, according to Reuters technical
analyst Wang Tao.
The dollar started the week on the defensive on Monday with the dollar index ,
which measures the greenback's value versus euro, yen and four other major
currencies, easing about 0.1 percent.
Hedge funds and other money managers cut their net long position in COMEX gold
to a six-week low in the week ended May
9, US Commodity Futures Trading Commission (CFTC) data showed.
Among other precious metals, silver was up 0.2 percent to $16.49.