Gold fell to its lowest price in two weeks as somewhat hawkish comments from Federal Reserve chairwoman Janet Yellen on Friday ignited a dollar rally following the three-day weekend.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange was down $17.10 to close at $1,186.90 per ounce, the lowest settlement since May 11. Trade ranged from $1,184.80 to $1,208.2, with support at $1,880.
The dollar was 0.9 percent stronger at $1.0878 against the euro, the highest price for the greenback since April 23. The dollar index was at 97.2380, up 1.3 percent.
“The four percent rebound in the dollar index from three-month lows is weighing on gold at the moment, which in turn looks to be dragging the entire precious metals complex lower, Joni Teves, an analyst at UBS, said. “In reality, we have seen no significant change in the macro environment for gold, which suggests recent price action may have been driven more by external influences, particularly the dollar.”
On Friday, Yellen said recent data was encouraging and could eventually lead to an interest rate increase this year.
“If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalizing monetary policy,” Yellen said in a speech Friday at the Greater Providence Chamber of Commerce.
Stanley Fischer, Federal Reserve vice aheads of states get the bighairman, followed-up with his own hawkish remarks about expected pushback from investors and a possible “taper tantrum” when interest rates rise even as the central bank has given ample forewarning of a rate hike.
In a mixed data day, US core durable goods orders month-over-month in April was in-line with forecasts of a 5.0 percent increase, while durable goods orders month-over-month was down 0.5 percent, off the estimates of a 0.4 percent decline.
HPI month-over-month in March rose 0.3 percent, off the forecast of 0.7 percent. March S&P/CS composite-20 HPI year-over-year climbed 0.5 percent, beating forecasts of an increase of 4.6 percent. Flash services PMI in May was 56.4, off the 57 estimates.
CB consumer confidence in May was 95.4, above expectations of 95.3, while April new home sales were at 517,000, beating predictions of 501,000. Richmond manufacturing index in May was 1, while forecasters pegged no change from the previous month.
While in Japan, May SPPI year-over-year beat analysts expectations with a 0.7 percent rise with the consensus expecting a 0.6 percent increase.
Meanwhile in equities, the Dow Jones industrial average and S&P were down 1.3 percent and 1.2 percent respectively.
As for the other precious metals, Comex silver for July delivery was down nearly three cents to $16.755 per ounce. Trade has ranged from $16.645 to $17.180.
Platinum futures for July delivery on the Nymex fell $23.1 at $1,125.50 per ounce, while the most-actively traded palladium contract was at $781.50, down $2.50.
(Editing by Tom Jennemann)
The post Gold slides below $1,200/oz after dollar rallies appeared first on The Bullion Desk.
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