Home The Watchforex news Gold prices inch up from one-year low as Trump slams strong dollar

Gold prices inch up from one-year low as Trump slams strong dollar

by Amwal Al Ghad English
gold

Gold prices rose on Friday from one-year lows hit the previous day and spot platinum increased more than 3 percent after U.S. President Donald Trump criticised the strength of the dollar and interest rate increases by the Federal Reserve, pushing the greenback to a four-day low.

Spot gold was up 0.45 percent at $1,227.91 an ounce and U.S. gold futures for August delivery settled up $7.10 at $1,231.10.

In an interview with CNBC that aired on Friday, Trump said another hike in interest rates would hit the U.S. economy. Following the airing, Trump took to Twitter, further criticizing the central bank.

“The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates – Really?” Trump said Friday on social media.

A White House official told CNBC that they assured the president that the Fed was doing “this right” but Trump was still concerned the central bank would raise rates two more times this year.

Fed Chairman Jerome Powell did nothing this week to counter expectations of two more rate rises this year and said the United States was poised for several more years of growth.

Higher interest rates tend to boost the dollar and raise the opportunity cost of holding non-yielding bullion.

“There’s a good chance that if you start to see any change in the stance on the dollar, rhetoric or comments from the Fed, I think you would see gold bounce back (up) pretty hard,” said Michael Ellingston trader at U.S. Global Investors in San Antonio.

Gold was still down almost 1 percent this week, with little sign of an end to the slide in prices that has knocked 10 percent off gold’s value since mid-May.

Bank of America Merrill Lynch said on Friday fears of a trade war had seen global investors plow $5 billion into bonds this week while pulling $1.2 billion from gold.

Meanwhile, funds and money managers have cut their net long position in Comex gold to a 2-1/2-year low, helping drive down prices. And gold-backed exchange traded funds tracked by Reuters have cut their holdings by more than 5 percent since their 2018 peak in mid-May.

Gold on Thursday touched $1,211.08 an ounce, the lowest since July last year.

On the technical front, support was at gold’s July 2017 low of $1,204.90 and Fibonacci resistance was at $1,234.70, analysts at ScotiaMocatta said, adding that technical and momentum indicators suggested prices would fall further.

Meanwhile, platinum gained 2.45 percent at $824.24, earlier rising 3.2 percent to $830.10, but on track to end the week barely changed. Its Friday performance followed gold prices, traders said.

Silver gained 1.42 percent at $15.48 but was still down nearly 2 percent this week. Palladium gained 2.37 percent at $890.10 but was set for a weekly loss of almost 5 percent.

Source: Reuters

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