Gold steady on sluggish dollar, Greek worries

Otmane El Rhazi from The Bullion Desk.

Gold was steady in the Asian trading hours on Thursday holding on to its gains from the previous sessions.

The spot gold price was last at $1,185.8/1,186.5 per ounce, largely unchanged from the previous close. Trade has ranged from $1,185.9 to $1,187.7 so far.

Yesterday the metal hit its highest in a week at $1,192.50 supported by dollar softness and the Greek debt crisis.

There is still uncertainty about Greece’s future in the eurozone. The country may still be able to agree a deal with creditors and avoid the inevitable default that would otherwise lead to the country exiting the bloc. Still, the country’s latest proposal was reportedly criticised by EU officials for still failing to meet creditors’ demands on VAT rates, pensions and budget targets.

In currencies, the dollar was last at around 1.1300 against the euro. Yesterday it hit its weakest since May 18 at 1.1386.

On the Shanghai Futures Exchange (SHFE) gold for December delivery was also unchanged – it recently traded at 240.35 yuan per gram.

In data today, New Zealand this morning lowered their benchmark interest rate to 3.25 percent and the Australian unemployment rate for May dropped to six percent from an expected 6.2 percent.

From China, industrial production, fixed asset investment and retail sales are scheduled for release this afternoon. From the eurozone, French final non-farm payrolls and French CPI are due and the US will release its core retail sales, retail sales, unemployment claims, import prices and business inventories numbers.

The US data will be eyed for more clues about the strength of the country’s economy. Strong data could increase prospects of a rate hike in September.

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 rates, which have been near zero since December 2008.

At its last meeting, the Fed 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 dependent on data so a rate increase could happen at any future meeting.

The other precious metals were unchanged – silver was last at $16.01/16.06, platinum at $1,112/1,117 and palladium at $742/748.

The post Gold steady on sluggish dollar, Greek worries appeared first on The Bullion Desk.