Gold prices were slightly higher on Wednesday as the yellow-metal retrenched after falling heavily the previous session and now hovers near the psychological $1,200 per ounce “magnet”.
Gold futures for July delivery on the Comex division of the New York Mercantile Exchange rose $1.80 to $1,208.50 per ounce. Trade has ranged from $1,202.7 to $1,212.5.
The price reached three-month highs late last week at $1,230 per ounce, but couldn’t maintain above the 200-day moving average as prices declined more than $20 yesterday. The dollar is 0.1 percent stronger at 1.1134 against the euro – the fourth straight day of increases for the greenback.
“So, back to reality for the precious complex as the dollar came storming back and once again put a stop to the recent rally in bullion,” Marex Spectron said. “This unfortunately just goes to prove what I have been saying for a seemingly very long time now, namely that we remain range bound and one has to continue to sell rallies to the top end at around $1,225 and buy dips near the bottom at around $1,175.”
Regardless of the fundamental or technical outlook the metals are “in complete thrall to the dollar and this continues to be the main driver,” Marex Spectron added.
In data, German PPI month-over-month in April was in-line with forecast predictions of a increase of 0.1 percent. While in Japan, preliminary GDP quarter-over-quarter in March is forecast to an increase of 0.6 percent, beating estimates of 0.4 percent. March preliminary GDP price index year-over-year was down 3.4 percent, slightly off the estimate of 3.6 percent.
The Federal Open Market Committee (FOMC) minutes will released be later today.
The members of the Fed’s policy board are locked in what has become an increasingly public debate on when will be the right time to raise interest rates, which have been near zero since December 2008.
At its last meeting, the Fed policy board removed all calendar references in its forward guidance and said that recent economic weakness might be “transitory” in nature. This means that bank is now entirely data dependent and a rate increase could happen at any future meeting.
Meanwhile in the eurozone, Germany’s DAX and France’s CAC-40 were down 0.3 percent and 0.2 percent respectively.
In other precious metals, Comex silver for July delivery was up less than a cent at $17.170 per ounce. Trade has ranged from $16.935 to $17.195. Platinum futures for July delivery on the Nymex rose $5.90 to $1,156.80, while the most-actively traded palladium contract was at $781.00, up $5.85.
Light sweet crude (WTI) oil futures on the Nymex climbed $0.75 or 1.3 percent at $58.74 per barrel.
(Editing by Tom Jennemann)
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