Gold hovers near five-week lows on firm dollar

Tuesday,   05-Mar-2019   09:14 AM (IST)

Gold hovered on Tuesday near a five-week low touched in the previous session as rising U.S. Treasury yields boosted the dollar, making gold expensive for holders in other currencies. Spot gold was flat at $1,286.35 per ounce as of 0123 GMT, after touching its lowest since Jan. 25 at $1,282.50 in the previous session. U.S. gold futures were also steady at $1,287.70 an ounce. The U.S. currency was trading against a group of six major currencies at close to its two-week high of 96.816 posted in the previous session. The dollar enjoyed some support from higher U.S. Treasury yields as data, including fourth-quarter gross domestic product, eased fears of a potentially rapid loss in economic momentum. U.S. Secretary of State Mike Pompeo said on Monday he thought the United States and China were “on the cusp” of a deal to end their trade war, adding to positive signs about negotiations from both sides of the Pacific. Asian shares stepped back on Tuesday after China cut its economic growth target and pledged measures to support the economy amid growing challenges from rising debt and a dispute over trade and technology with the United States. China has set its 2019 economic growth target at 6.0 to 6.5 percent, Premier Li Keqiang said in his annual work report on Tuesday, lower than last year’s goal of around 6.5 percent. China and India raised gold holdings in January, according to data from IMF. Bank of America Merrill Lynch lifted its forecast for palladium, expecting it to hit a key $2,000 level this year. The bank said it expects platinum to average $883 for the same period. Barrick Gold Corp Chief Executive Mark Bristow said on Monday he wants to speak immediately with Newmont Mining Corp about a proposed Nevada joint venture, even as his company moves to take an $18 billion takeover offer directly to Newmont shareholders. Bank of Italy’s Governor Ignazio Visco said on Monday the country’s reserves of gold belonged to the central bank and could not be used to fund government spending.