Gold price ticks higher but dollar remains strong – BULLION AFTERNOON

Otmane El Rhazi from The Bullion Desk.

Gold price edged higher on Tuesday afternoon but remains below the psychological $1,200 level on sustained dollar strength in what has been a busy day for data.

The spot gold price was last at $1,187/1,188 per ounce, up around $1 on Monday’s close, having hit an intraday low of $1,178 earlier this morning. It has traded in an intraday range of around $13.

In currencies, the dollar remains strong – it was last at 1.0754 against the euro, a gain of around three-quarters of a cent. The single currency is under pressure from concerns surrounding Greece’s ability to meet EU bailout terms, while in the US the Fed moves ever closer to raising interest rates from near-zero levels, which would be supportive of the dollar.

“There seems to be a consensus amongst traders at the moment the dollar is set to resume its bull run in the short term, which should keep the upside capped for the precious complex,” MKS Finance noted.

“That being said although gold is looking soft at present, it is proving to be fairly resilient when comparing to other commodities – namely base metals, crude and the PGMs,” the broker added.

In data today, 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 disappointed at 46.3, while the CB consumer index was better than expected at 101.3.

The Chinese HSBC flash manufacturing PMI and manufacturing numbers scheduled for Wednesday and Friday’s blockbuster US jobs data – the country is expected to have added 251,000 non-farm jobs this month, down from 295,000 in February – will be closely watched.

In the other metals, platinum was last $19 higher at $1,137/1,142 per ounce while silver was largely unchanged at $16.69/16.74 as was palladium at $728/733 – the metal hit a one-year low yesterday at $723.

“The technical picture has become even more gloomy, in other words, meaning that we cannot rule out further price slides in the near term,” Commerzbank said in a note.

(Editing by Mark Shaw)

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