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MTECHTIPS:-Gold trades near 2-week low on Fed rate hike outlook
Wednesday, May 27, 2015 6:12
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MTECHTIPS:-Gold trades near 2-week low on Fed rate hike outlook
Gold prices held near a two-week low struck in the previous session on Wednesday, amid growing prospects the Federal Reserve was on track to raise interest rates later this year. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery inched up $2.60, or 0.22%, to trade at $1,190.40 a troy ounce during European morning hours. A day earlier, gold fell to $1,185.60, the lowest level since May 12, before ending at $1,187.80, down $17.10, or 1.42%, after a batch of upbeat U.S. data bolstered the case for a Fed rate hike this year. Futures were likely to find support at $1,181.00, the low from May 12, and resistance at $1,208.90, the high from May 26. Also on the Comex, silver futures for July delivery tacked on 0.9 cents, or 0.05%, to trade at $16.75 a troy ounce. Silver hit $16.64 on Tuesday, a level not seen since May 13, before closing down 30.5 cents, or 1.79%, at $16.74. The euro and the yen pushed higher against the U.S. dollar on Wednesday, as the greenback paused following a rally on the back of expectations for a U.S. rate hike later this year. The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.3% to 97.10, off the five-week peaks of 97.47 set during the previous session.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery inched up $2.60, or 0.22%, to trade at $1,190.40 a troy ounce during European morning hours. A day earlier, gold fell to $1,185.60, the lowest level since May 12, before ending at $1,187.80, down $17.10, or 1.42%, after a batch of upbeat U.S. data bolstered the case for a Fed rate hike this year. Futures were likely to find support at $1,181.00, the low from May 12, and resistance at $1,208.90, the high from May 26. Also on the Comex, silver futures for July delivery tacked on 0.9 cents, or 0.05%, to trade at $16.75 a troy ounce. Silver hit $16.64 on Tuesday, a level not seen since May 13, before closing down 30.5 cents, or 1.79%, at $16.74. The euro and the yen pushed higher against the U.S. dollar on Wednesday, as the greenback paused following a rally on the back of expectations for a U.S. rate hike later this year. The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.3% to 97.10, off the five-week peaks of 97.47 set during the previous session.
