Gold snaps three sessions of gains as dollar, equities edge up

BENGALURU: Gold prices slipped on Wednesday after rising for three straight sessions as investors opted for riskier assets, with the dollar holding its gains on the back of upbeat US economic data.

“There was a general increase in risk appetite, which boosted equities … Conversely, there was less demand for safe-haven assets such as gold,” said John Sharma, an economist with National Australia Bank.

Spot gold was down 0.3 per cent at $ 1,343.31 per ounce at 0709 GMT, US gold futures for June delivery fell 0.2 per cent to $ 1,346.30 per ounce.

Gold prices had surged to $ 1,365.23 per ounce last week, their highest since Jan. 25, on heightened tensions over Syria and US sanctions on Russia.

“Historically, geopolitical tensions have a short-term impact on price movement, but overall it is the economy that determines prices,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.

The dollar index , which measures the greenback against a basket of currencies, was up 0.2 per cent at 89.657.

The index touched a three-week low of 89.229 on Tuesday before pulling back on stronger-than-expected March US housing starts and steady industrial production figures.

A stronger greenback makes dollar-priced gold costlier for holders of other currencies.

Asian shares inched up after Wall Street took heart from upbeat corporate earnings.

The gold market has also seen some profit-booking from recent peak levels, said Hareesh V, head of commodity research, Geojit Financial Services.

“Currently there has been no significant news update or event from the global point of view, further prompting the mild correction in prices,” Hareesh said.

Spot gold may retrace to a support level at $ 1,334 per ounce because it failed to break resistance at $ 1,350, said Reuters technical analyst Wang Tao.

Meanwhile, spot silver climbed 0.2 per cent to $ 16.78 per ounce, after touching a one-week high of $ 16.83 earlier in the session.

Platinum advanced 0.5 per cent to $ 941.10 per ounce. Prices earlier marked a three-week high of $ 944.10.

Palladium rose 0.1 per cent to $ 1,010.47 per ounce.