Gold prices unchanged amid firm US dollar, treasuries

image

BENGALURU: Gold prices were flat in early trade on Friday after hitting a fresh 2018 low overnight, as the dollar and US bond yields held firm near their recent highs.

FUNDAMENTALS

Spot gold was unchanged at $1,290.12 per ounce at 0037 GMT, after marking its lowest since Dec. 27 in the previous session at $1,285.41.

US gold futures for June delivery were steady at $1,289.50 per ounce.

The dollar index , which measures the greenback against a basket of six major currencies, was steady at 93.491, after hitting the highest level for the year earlier this week at 93.632.

Yields on benchmark 10-year US Treasuries hovered close to their highest level in seven years.

US President Donald Trump sought on Thursday to placate North Korea’s leader Kim Jong Un after Pyongyang threatened to scrap an unprecedented summit, saying Kim’s security would be guaranteed in any deal and his country would not suffer the fate of Muammar Gaddafi’s Libya, unless that could not be reached.

Trump said on Thursday that China had become “very spoiled” on trade with the United States and cast doubt on the success of his efforts to rebalance the relationship with Beijing as high-stakes US-China negotiations opened in Washington.

The US economy has reached the threshold for maximum employment and it may already be lower than is sustainable, Dallas Fed President Robert Kaplan said on Thursday.

New applications for US jobless benefits increased more than expected last week, but the number of Americans on unemployment rolls fell to its lowest level since 1973, pointing to diminishing labor market slack.

Ewald Nowotny, a member of the European Central Bank’s Governing Council, urged the ECB on Thursday not to wait too long to normalize its monetary policy.

Europe needs a rainy-day fund to support it in the event of any future crisis, and the European Central Bank will have “no excuse” not to buy up government debt to ease any liquidity crunches, the ECB’s outgoing vice president said on Thursday.

Japan’s core consumer prices rose 0.7 per cent in April from a year earlier, government data showed on Friday, showing little of the inflationary momentum needed to reach the central bank’s elusive 2 per cent target.

Source: Economic Times