The gold price stayed below $1,200 on Tuesday morning in Europe, with renewed dollar strength weighing on the metal.
The spot gold price was last at $1,190.20/1,191, down $8.30 on Monday’s close and around two-week lows. Trade has ranged from $1,190 to $1,201.7 so far today – pressure has shifted to the downside, returning gold to its previous sub-$1,200 consolidation range.
“Gold has been able for quite some time to defend itself relatively well against the appreciating US dollar – which is again nearing its mid-March multi-year high against the euro – but has fallen significantly below $1,200 this morning,” Commerzbank said in a note.
The dollar remains robust and was last trading around 1.0545 against the euro. It is not far off the recent 1.0457, which was the highest since January 2003.
“Mixed results from China’s March trade data (Monday) and dollar strength will keep sentiment in commodities weak,” broker ANZ said.
China’s trade balance shrank to $3.1 billion from February’s $60.6 billion – a fall of 95 percent and the lowest reading in a year.
In today’s data, China’s new loans for March at 1.18 trillion yuan were better than the forecast 1.05 trillion yuan. But the country’s M2 money supply disappointed at 11.6 percent – a reading of 12.3 percent was expected.
Elsewhere, the German WPI at 1.0 percent came in better than the forecast as did the eurozone’s industrial production at 1.1 percent.
China releases its quarterly GDP on Wednesday as well as industrial production data, fixed asset investment and retail sales figures. GDP could come in under par after the soft trade data.
For today, the key data event will be US retail figures this afternoon – a positive outturn will bolster prospects for interest-rate increases from the Federal Reserve later this year as well as further strengthening the dollar.
The Federal Reserve is debating when will be the right time to raise rates. The current market consensus is that the first increase will happen in the second half of this year.
In the other metals, silver was last at $16.13/16.18 per ounce, down 11 cents and palladium at $759/764 was down $7.
“The other precious metals are also under pressure in gold’s slipstream, and have all fallen more sharply,” Commerzbank said.
Platinum at $1,145/1,149 per ounce was down $4.
“Platinum, historically trades at a premium to gold, but has slipped to a discount since the middle of January this year. They may be due to investor realization that above ground stocks of platinum may be higher than originally anticipated,” HSBC said in a note.
(Additional reporting by Martin Hayes, editing by Mark Shaw)
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