A weak dollar makes dollar-priced assets such as gold cheaper for holders of other currencies.
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Gold headed for a fourth loss in five days as a jump in US retail sales pointed to an improving economy, reducing demand for the metal as a haven.
But expectations that the US Federal Reserve is unlikely to raise interest rates at its next meeting in June should help gold find strong support at $1,250 an ounce, said OCBC Bank analyst Barnabas Gan. Wong believes market opinions remain mixed on when the Fed will hike rates next after raising them for the first time in almost a decade last December.
Gold futures for June delivery slid 0.3 percent to settle at $1,271.20 an ounce at 2 p.m. on the Comex in NY. But Wong said physical gold demand in top consumer China remained scarce, possibly due to the high price. For the week, gold declined 1.65 percent, the first weekly loss since April 22.
The SPDR Gold Trust ETF ( GLD ), the world’s largest gold-backed exchange traded fund, saw an increase of 0.3% on Tuesday, May 10, 2016, to its highest level since December 2013. Gold has risen almost 20 percent this year, benefiting from expectations that the Fed is unlikely to raise interest rates anytime soon.
Gold futures on the COMEX division of the New York Mercantile Exchange fell slightly on Thursday as the USA dollar strengthened and US equities steadied. The World Gold Council’s Gold Demands Trends quarterly report revealed that gold demand rose 21% to 1,290 tonnes in the first quarter of the year against the year-ago period, marking the second biggest quarter on record. The metal had touched a 15-month high last week at US$1,303.60, before slipping back below US$1,300.
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Gold rose as much as 1% as European stocks retreated for a third day after weakening corporate earnings eroded investor confidence. Investors will be eyeing the weekly USA jobless claims tonight for trading cues later in the global session, with MKS Group trader Jason Cerisola seeing support for gold at $1,260 and resistance at $1,280. July Comex silver was last up $0.238 at $17.33 an ounce.
