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Gold at near 4-week low

downloadGold futures fell Wednesday to the lowest levels in nearly four weeks, dragged down by a stronger dollar despite safe-haven buying that followed the terror attacks in Brussels on Tuesday.


Gold for April delivery, the most actively traded contract, settled down 2% to $1,224 a troy ounce, according to CME Group Inc. Front-month gold futures have been down for 10 of the past 13 trading sessions and are the lowest since Feb. 26.

Some analysts attributed the decline Wednesday to recent comments by Federal Reserve officials, who suggested the central bank could still raise benchmark interest rates despite keeping them steady in March.

Higher rates would boost the dollar and make gold more expensive for investors who hold other currencies, pushing the price down. The WSJ Dollar Index, which measures the greenback against a basket of other currencies, was up 0.5% on Wednesday.

Gold futures are still up 15% on the year, according to FactSet, reflecting demand for safety earlier in the year as riskier assets were roiled by fears of a recession.

With little fundamental news ahead of the Easter holiday, the market has slowed for now.

“With the long weekend looming and the market overly long, this [drop] is a perfectly understandable and somewhat overdue move, as we see profit-taking and book squaring ahead of Easter,” said David Govett, head of precious metals at Marex Spectron, a global commodities broker.

Following a series of explosions in Brussels, gold prices rose more than 0.7% Tuesday morning, alongside other safe-haven assets, including the dollar and government debt. At the time, Mr. Govett said the rise was exaggerated and unlikely to be sustained.

But by the end of the day, the metal had pared its gains as the dollar continued to strengthen, and gold futures settled up just 0.4%.

Market reactions to terror attacks tend to be short-lived. Gold rallied on the first day of trading after the Paris attacks in November, but by the end of the day, the metal had closed slightly down.


Source: http://classfmonline.com/1.8829519

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Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
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