The Investor SA

Gold moves further below $1200 on stronger dollar

 

30 March, 2015

by Investing.com 

 

Gold prices extended losses from the previous session on Monday, as traders monitored the direction of

the U.S. dollar to gauge the appeal of the precious metal.

 

On the  Comex  division of the New York Mercantile Exchange, gold futures for June delivery touched an

intraday low of  $1,187.10  a  troy  ounce, before trading at  $1,187.50  during European morning hours,

down $13.20, or 1.1%.

 

On Friday, gold lost  $5.00, or  0.41%,  to  close  at  $1,200.70. Futures  were  likely  to  find  support  at

$1,178.60, the low from March 23, and resistance at $1,220.40, the high from March 26.

 

The U.S.  dollar index, which measures the greenback’s strength against a trade-weighted basket of six

major currencies, was up 0.55%  to 98.15 early on Monday. The index slid 0.66% last week, the second

consecutive weekly decline.

 

Gold often moves inversely to the U.S. dollar, as prices become more expensive for buyers using  other

currencies.

 

The dollar pushed higher against the euro and the yen after Federal Reserve Chair Janet Yellen reiterated

Friday that the bank is likely to start raising interest rates later this year.

 

Investors  were  turning their  attention to Friday’s U.S.  employment report for February, and Monday’s

data on personal spending for further indications on the path of monetary policy.

 

A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will

begin to raise interest rates, while a weak number could boost gold by undermining the argument  for  an

early rate hike.

 

Gold fell to a four-month low of $1,141.60 on March 17 amid concerns that the Fed will start raising rates

as early as in June, before rallying for seven consecutive sessions after the Federal Reserve projected  a

slower pace of rate hikes.

 

Elsewhere on the Comex, silver futures for May delivery lost  32.9  cents, or  1.93%, to trade at  $16.74  a

troy ounce, while copper for May delivery tacked on 0.6 cents, or 0.22%, to trade at $2.774 a pound.

 

Copper remained supported amid speculation policymakers in China will do more to support growth following comments made by People's Bank of China Governor Zhou Xiaochuan over the weekend.

 

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year