Gold price remained below the psychological $1,200 level on Tuesday morning, under pressure from a strong dollar and increased appetite for risk.
The spot gold price was last at $1,180/1,180.9 per ounce, down $6.20 on Monday’s close and around its weekly low.
The dollar remains upbeat following the release of positive US data on Monday – it was last at 1.0728 against the euro, a cent stronger, with the single currency under pressure from concerns surrounding Greece’s ability to meet EU bailout terms.
“There seems to be a consensus amongst traders at the moment the US dollar is set to resume its bull run in the short term which should keep the upside capped for the precious complex,” MKS said in a note.
Speculation of additional policy easing in China supported global equities and risk appetite, which has probably weighed on gold, HSBC Securities said in a note.
People’s Bank of China (PBoC) governor Zhou Xiaochuan said over the weekend that the dollar could grow “too strong” and that there is more room for Beijing to ease monetary policy further to boost its economy if needed. Growth has slowed, he noted, but the central bank has room to act on interest rates or with fresh quantitative easing measures.
Chinese authorities also intervened to fight the slowdown in the housing market. On Monday, the finance ministry decided to reduce the threshold of the capital-gain tax exemption to two years from five years after the PBoC lowered the minimum down payment requirement for buyers of second homes to 40 percent from 60 percent.
In a busy day for data, Japanese housing starts at -3.1 percent beat the forecast -7.0 percent and were up strongly from the previous -13 percent.
German retail sales and the country’s unemployment change were both better than expected, while French consumer spending undershot.
The unemployment rate for the eurozone as a whole fell to 11.3 percent from 11.4 percent but missed the expected drop to 11.2 percent. The CPI flash estimate was -0.1 percent, better than the forecast -0.3 percent, while the core CPI flash estimate at 0.6 percent was in line.
But the Italian monthly unemployment rate was also worse than expected at 12.7 percent and its preliminary CPI at 0.1 percent also undershot.
From the US, the Chicago PMI and CB consumer confidence are due but the Chinese HSBC flash manufacturing PMI and manufacturing numbers scheduled for Wednesday and Friday’s US non-farm payrolls data will also be closely watched.
In the other metals, silver was largely unchanged at $16.50/16.55 per ounce while palladium at $734/739 was up $6 – the metal hit a one-year low yesterday at $723.
Although the metal had outperformed gold, silver and platinum since the start of the year, MKS expects “further liquidation on rallies back towards $750″ after it breached technical support last week.
Platinum was last at $1,119/1,124 per ounce, up $1.
(Editing by Mark Shaw)
The post Gold price still under pressure from strong dollar, firm equities – BULLION MORNING appeared first on The Bullion Desk.
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