Gold prices hold near 1-week lows on stronger dollar

Thursday,   07-Feb-2019   09:06 AM (IST)

Gold on Thursday held near one-week lows touched in the previous session amid a stronger dollar, but worries over slowing global economic growth and the spectre of another U.S. government shutdown kept the safe-haven metal above the key $1,300-level. Spot gold was steady at $1,306.81 per ounce at 0050 GMT. Prices fell 0.7 percent in the previous session in their biggest one-day drop since Jan. 18, at one point touching their lowest since Jan. 29 at $1,305.30. U.S. gold futures were down 0.3 percent at $1,310.70. Wall Street’s benchmark S&P 500 slipped amid concerns over growth, disappointing earnings reports and another possible U.S. government shutdown in the wake of President Donald Trump’s State of the Union address. Australia’s central bank was the latest to signal policy easing in the face of economic headwinds. Last week, the U.S. Federal Reserve said it would be patient on further rate hikes, while the European Central Bank sounded less certain that it would start tightening policy later this year. The Bank of England looks set to trim its forecasts for Britain’s already sluggish growth on Thursday, reflecting the approach of a still uncertain Brexit in just 50 days’ time and a slowdown in many of the world’s big economies. The dollar index, a gauge of its value versus six major peers, was hovering close to its two-week high in early Asian trade. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies. Liquidity in gold markets is expected to remain light in Asian hours with China closed for the Lunar New Year holiday this week. U.S. Treasury Secretary Steven Mnuchin said in an interview with CNBC on Wednesday that he and other U.S. officials will travel to Beijing next week for trade talks with Chinese officials. U.S. Fed Chairman Jerome Powell will testify before the House Financial Services Committee on Feb. 27, the committee’s Democratic chairwoman said in a statement on Wednesday. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, declined 0.25 percent to 809.76 tonnes on Wednesday from Tuesday. Holdings have fallen for a fourth straight session. Venezuelan President Nicolas Maduro’s government last year sold 73 tonnes of gold to Turkey and the United Arab Emirates without the required approval of the opposition-led National Assembly, an opposition legislator said on Wednesday.