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Gold prices ease off 15-week peak as dollar rises

Thursday,   06-Jun-2019   09:06 AM (IST)

Gold prices edged lower on Thursday, easing from the previous session’s 15-week high as the dollar recovered from multi-week lows, although trade concerns and a possible U.S. rate cut offered support for safe-haven bullion. Spot gold was down 0.1% to $1,328.25 per ounce as of 0124 GMT, after hitting its highest since Feb. 20 at $1,343.86 on Wednesday. U.S. gold futures were 0.2% lower at $1,331.40 an ounce. The dollar recovered from an eight-week low touched in the previous session against a basket of major currencies on optimism over U.S.-Mexico trade talks, and a survey showing that U.S. services sector activity expanded at a brisk pace in May. Mexican and U.S. officials are set to resume talks in Washington on Thursday aimed at averting an imposition of tariffs on Mexican goods, with President Donald Trump saying “not enough” progress on ways to curb migration was made on Wednesday. The U.S. Federal Reserve on Wednesday reported that its contacts at companies across the country were worried that international trade tensions could weigh on business even as economic activity picked up. The ADP National Employment Report on Wednesday further bolstered bets for a rate cut. U.S. private employers hired at the slowest pace in more than nine years in May, weakness that analysts blamed on the heightening global trade tensions. Asian shares got off to a hesitant start on Thursday as investors feared a looming U.S. trade war with Mexico would further depress global growth, even as they wagered central banks would have to respond with fresh stimulus New Zealand’s central bank cut its benchmark interest rate for the first time in two-and-a-half years on Wednesday, and signalled a 50-50 chance of another easing, sending the local dollar sharply lower. The U.S. Labor Department delivers its non-farm payrolls report on Friday. Economists polled by Reuters expect the report to show job growth slowed in May.