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Gold Firm After Overnight Losses

Gold Firm After Overnight LossesGold Firm After Overnight Losses

Gold steadied below $1,200 an ounce on Tuesday after small losses in the previous session, while traders eyed the dollar and an upcoming Swiss referendum on central bank gold reserves for more trading cues.

The November 30 vote is aimed at preventing the Swiss National Bank from offloading its gold holdings and obliging it to hold at least 20 percent of its assets in gold, compared with 8 percent last month, Reuters reported.

Markets believe a ‘yes’ vote could boost gold prices, which fell to a 4-1/2-year low earlier this month, though the most-recent opinion poll showed that support among Swiss voters for the initiative has slipped to 38 percent.

Spot gold was up 0.1 percent at $1,198.76 an ounce by 0716 GMT, below a three-week high of $1,207.70 hit on Friday. The metal fell 0.3 percent in the previous session as the rally from a surprise rate cut in top consumer China faded.

Traders were awaiting US economic data due later in the day for cues on the strength of the economy and its impact on the dollar. Robust economic data could hurt gold as it would prompt the US Federal Reserve to raise interest rates sooner than later. Bullion is a non-interest-bearing asset.

A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies, and also dents bullion’s appeal as a hedge.

A rebound in the euro knocked the dollar index off a 4-1/2-year high on Tuesday but the greenback continued to be well-supported.

Among other precious metals, platinum gained about 1 percent after a 2 percent drop overnight. Silver and palladium also ticked higher.

 

Financialtribune.com