Gold little changed amid firm dollar; Iran tensions support

BENGALURU: Gold traded sideways in a tight range on Thursday as the dollar held firm near its 2018 peak on strong US bond yields, with investors also keeping an eye out for any further impact from US President Donald Trump’s decision to pull out of a nuclear deal with Iran.

Spot gold was nearly unchanged at $ 1,311.82 per ounce by 0714 GMT.

US gold futures for June delivery were 0.1 per cent lower at $ 1,312 per ounce.

“This time around I think the rising geopolitical tensions in the Middle East added some safe-haven appeal to gold,” said Helen Lau, analyst at Argonaut Securities in Hong Kong.

“A lot of counteracting forces are playing against gold so that’s why it’s trading in a very tight range,” Lau said, adding that a firm dollar and rising US Treasury yields were capping upside.

Asian stocks rose on Thursday with energy shares leading the way as crude oil prices bolted higher after US President Donald Trump’s decision to scrap the nuclear deal with Iran.

Dismayed European allies sought on Wednesday to salvage the deal with Iran after Trump ordered sanctions be reimposed on Tehran.

The dollar held firm on Thursday after the 10-year US bond yield rose back to the psychologically important 3 per cent mark and investors looked to US consumer price (CPI) data due later to show a acceleration in inflation.

The US CPI data will also be scoured for outlook on the Federal Reserve’s interest rate hike path after weaker-than-expected data earlier this month did little to dampen expectations of a June interest rate hike.

Higher US rates tend to boost the dollar and push bond yields up, adding pressure on greenback-denominated, non-yielding gold.

Elsewhere, investors are pushing back expectations for a rise in euro zone interest rates further into 2019 against a backdrop of soft economic data and disappointing inflation numbers, money market pricing suggested.

Holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, fell 0.14 per cent to 862.95 tonnes on Wednesday.

Spot gold looks neutral in a range of $ 1,302-$ 1,317 per ounce, said Reuters technical analyst Wang Tao.

Meanwhile, in other precious metals, silver was 0.1 per cent higher at $ 16.49 an ounce, after hitting a two-week high at $ 16.62 in the previous session.

Platinum rose 0.1 per cent to $ 910.74 an ounce while palladium remained unchanged at $ 974.75.